$ 228,366

$ 181,634

$ 203,005

Cost of sales:

2,871

1,444

887

119,483

94,460

103,325

General and administrative

108,883

87,174

99,680

Operating expenses:

Sales and marketing

44,517

33,955

33,847

Research and development

33,178

28,566

30,955

28,565

13,331

17,026

Restructuring charges, net

301

2,515

747

106,561

78,367

82,575

Other income (expense), net

2,322

8,807

17,105

Other income (expense), net:

Interest income

445

656

545

Interest expense

(25)

(48)

(291)

(669)

Total other income (expense), net

468

684

(415)

Income from continuing operations, before income taxes

2,790

9,491

16,690

Income tax provision

1,487

125

3,212

Income from continuing operations

1,303

9,366

13,478

Income from discontinued operations, after income taxes

3,230

$ 1,303

$ 9,366

$ 16,708

Basic net income per common share:

$ 0.05

$ 0.35

$ 0.52

0.00

0.13

Diluted net income per common share:

0.05

0.35

0.65

0.05

0.35

0.51

0.00

0.12

Net income (1)

$ 0.05

$ 0.35

$ 0.64

^[1]

Weighted average common shares:

Basic (shares)

27,083

26,432

25,760

Diluted (shares)

27,652

27,099

26,311

Hardware product

Revenue:

$ 191,050

$ 166,480

$ 196,101

Cost of sales:

96,332

85,369

97,776

Services and solutions

Revenue:

37,316

15,154

6,904

Cost of sales:

Statement of Comprehensive Income [Abstract]

$ 20,280

$ 7,647

$ 4,662

[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 - USD ($)
$ in Thousands

12 Months Ended

Sep. 30, 2018

Sep. 30, 2017

Sep. 30, 2016

Other comprehensive (loss) income, net of tax:

$ 1,303

$ 9,366

$ 16,708

Foreign currency translation adjustment

(865)

2,041

(2,107)

Change in net unrealized (loss) gain on investments

(31)

(14)

Less income tax benefit (provision)

(20)

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

^[1]

(7)

Less income tax benefit (provision) (2)

^[2]

(8)

Other comprehensive (loss) income, net of tax

(867)

2,032

(2,078)

Comprehensive income

$ 436

$ 11,398

$ 14,630

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

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017
Current assets:
Cash and cash equivalents	$ 58,014	$ 78,222
Marketable securities	4,736	32,015
Accounts receivable, net	50,817	28,855
Inventories	41,644	30,238
Receivable from sale of business	0	1,998
Other	2,613	3,032
Assets held for sale	5,220	0
Total current assets	163,044	174,360
Marketable securities, long-term	0	4,753
Property, equipment and improvements, net	6,270	12,801
Identifiable intangible assets, net	39,320	11,800
Goodwill	154,535	131,995
Deferred tax assets	6,665	9,211
Other	1,291	269
Total assets	371,125	345,189
Current liabilities:
Accounts payable	12,911	6,240
Accrued compensation	8,190	4,325
Accrued warranty	1,172	987
Accrued professional fees	1,367	928
Unearned revenue	2,579	1,343
Accrued restructuring	453	1,656
Contingent consideration on acquired businesses	5,890	388
Other	2,413	2,113
Total current liabilities	34,975	17,980
Income taxes payable	851	877
Deferred tax liabilities	334	534
Contingent consideration on acquired businesses	4,175	6,000
Other non-current liabilities	510	654
Total liabilities	40,845	26,045
Commitments and Contingencies (see Notes 15 & 16)
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; 33,812,838 and 33,007,993 shares issued	338	330
Additional paid-in capital	255,936	245,528
Retained earnings	151,748	150,478
Accumulated other comprehensive loss	(23,526)	(22,659)
Treasury stock, at cost, 6,385,336 and 6,436,578 shares	(54,216)	(54,533)
Total stockholders’ equity	330,280	319,144
Total liabilities and stockholders’ equity	$ 371,125	$ 345,189

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Sep. 30, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value (USD per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	33,812,838	33,007,993
Treasury stock, shares	6,385,336	6,436,578

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Operating activities:
Net income	$ 1,303	$ 9,366	$ 16,708
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation of property, equipment and improvements	2,835	2,900	2,742
Amortization of identifiable intangible assets	9,435	2,597	1,872
Stock-based compensation	4,854	4,659	3,654
Excess tax benefits from stock-based compensation	0	(326)	(212)
Deferred income tax (benefit) provision	(508)	(2,108)	1,115
Gain on sale of property, equipment and improvements	(622)	0	0
Gain on sale of business	0	0	(2,870)
Change in fair value of contingent consideration	1,377	(4,364)	(441)
Bad debt/product return provision	1,120	361	168
Inventory obsolescence	2,056	1,850	1,734
Restructuring charges, net	301	2,515	747
Other	67	(9)	66
Changes in operating assets and liabilities (net of acquisitions):
Accounts receivable	(17,002)	833	(1,188)
Inventories	(9,186)	(4,484)	3,993
Other assets	(1,412)	562	597
Income taxes	697	(3)	(1,589)
Accounts payable	2,728	(3,536)	1,612
Accrued expenses	(821)	(8,338)	(1,619)
Net cash (used in) provided by operating activities	(2,778)	2,475	27,089
Investing activities:
Purchase of marketable securities	0	(61,964)	(74,759)
Proceeds from maturities of marketable securities	32,032	87,105	73,706
Proceeds from sale of business	2,000	3,000	2,849
Acquisition of businesses, net of cash acquired	(56,258)	(30,111)	(2,860)
Proceeds from sale of property and equipment	731	0	0
Proceeds from sale of investment	0	0	13
Purchase of property, equipment, improvements and certain other intangible assets	(1,842)	(1,773)	(2,729)
Net cash used in investing activities	(23,337)	(3,743)	(3,780)
Financing activities:
Acquisition earn-out payments	0	(518)	0
Excess tax benefits from stock-based compensation	0	326	212
Proceeds from stock option plan transactions	5,460	3,502	7,191
Proceeds from employee stock purchase plan transactions	1,115	685	896
Repurchase of common stock	(748)	(938)	(550)
Net cash provided by financing activities	5,827	3,057	7,749
Effect of exchange rate changes on cash and cash equivalents	80	706	(349)
Net (decrease) increase in cash and cash equivalents	(20,208)	2,495	30,709
Cash and cash equivalents, beginning of period	78,222	75,727	45,018
Cash and cash equivalents, end of period	58,014	78,222	75,727
Supplemental disclosures of cash flow information:
Interest paid	10	1	9
Income taxes paid, net	1,235	2,129	3,029
Supplemental schedule of non-cash investing and financing activities:
Accrual for capitalized intangible asset	(78)	(36)	(183)
Receivable related to sale of business	0	0	4,956
Liability related to acquisition of business	$ (2,300)	$ (1,310)	$ (10,550)

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, 2015	$ 274,938	$ 315	$ (54,535)	$ 227,367	$ 124,404	$ (22,613)
Beginning balance (in shares) at Sep. 30, 2015		31,534	6,487
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	16,708				16,708
Other comprehensive income (loss)	(2,078)					(2,078)
Employee stock purchase issuances (in shares)			(104)
Employee stock purchase issuances	896		$ 876	20
Repurchase of common stock (in shares)			48
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)			(914)
Accelerated vesting of Etherios stock award plans	184			184
Stock-based compensation expense	3,654			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)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	9,366				9,366
Other comprehensive income (loss)	2,032					2,032
Employee stock purchase issuances (in shares)			(72)
Employee stock purchase issuances	685		$ 614	71
Repurchase of common stock (in shares)			78
Repurchase of common stock	(938)		$ (938)
Issuance of stock under stock award plans (in shares)		537
Issuance of stock under stock award plans	3,502	$ 5		3,497
Tax impact from equity awards	(191)			(191)
Stock-based compensation expense	4,659			4,659
Ending balance (in shares) at Sep. 30, 2017		33,008	6,437
Ending balance at Sep. 30, 2017	319,144	$ 330	$ (54,533)	245,528	150,478	(22,659)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative-effect adjustment from adoption of ASU 2016-09 \| ASU 2016-09	19			52	(33)
Net income	1,303				1,303
Other comprehensive income (loss)	(867)					(867)
Employee stock purchase issuances (in shares)			(126)
Employee stock purchase issuances	1,115		$ 1,065	50
Repurchase of common stock (in shares)			74
Repurchase of common stock	(748)		$ (748)
Issuance of stock under stock award plans (in shares)		805
Issuance of stock under stock award plans	5,460	$ 8		5,452
Stock-based compensation expense	4,854			4,854
Ending balance (in shares) at Sep. 30, 2018		33,813	6,385
Ending balance at Sep. 30, 2018	$ 330,280	$ 338	$ (54,216)	$ 255,936	$ 151,748	$ (23,526)

Summary of Significant Accounting Policies

12 Months Ended

Sep. 30, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Description

We are a leading global provider of business and mission-critical and Internet of Things ("IoT") connectivity products and services. We help our customers create next-generation connected products and deploy and manage critical communications infrastructures in demanding environments with high levels of security and reliability. We have two reportable operating segments under applicable accounting standards: (i) IoT Products & Services (formerly "M2M") segment; and (ii) IoT Solutions (formerly "Solutions") segment.

Our IoT Products & Services segment consists primarily of distinct communications products and communication product development services. Among other things, these products and services help our customers create next-generation connected products and deploy and manage critical communications infrastructures in demanding environments with high levels of security and reliability. This segment creates secure, easy-to-implement embedded solutions and services to help customers build IoT connectivity. It also deploys ready-to-use, complete box solutions to connect remote equipment, including products from our January 2018 acquisition of Accelerated Concepts, Inc. ("Accelerated"). The IoT Products & Services segment also offers dedicated professional services for the design of specialized wireless communications products for customers. Finally, this segment offers managed cloud services that enable customers to capture and manage data from devices they connect to networks. Our IoT products and services are used by a wide range of businesses and institutions.

Our IoT Solutions segment offers wireless temperature and other condition-based monitoring services as well as employee task management services. These solutions are focused on three primary vertical markets: healthcare (including retail pharmacies), food service and transportation/logistics. The solutions are marketed as SmartSense by Digi^™, formerly Digi Smart Solutions. We have formed, expanded and enhanced the IoT Solutions segment through four acquisitions. These include: the October 2015 acquisition of Bluenica Corporation ("Bluenica"), the November 2016 acquisition of FreshTemp^®, LLC ("FreshTemp^®"), the January 2017 acquisition of SMART Temps^®, LLC ("SMART Temps^®") and the October 2017 acquisition of TempAlert, LLC ("TempAlert").

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 had a major effect on our operations and financial results, we classified our Etherios business as discontinued operations, which requires retrospective application to financial information for all periods presented. Since the cost of segregating the consolidated statement of cash flows outweighed the benefits, we elected not to segregate our consolidated statement of cash flows as the material items in the operating and investing sections are disclosed in Note 3 to our Consolidated Financial Statements.

Principles of Consolidation

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

Reclassifications

Certain prior year amounts have been reclassified to conform to our fiscal 2018 presentation. On the Consolidated Balance Sheet for the period ended September 30, 2017, contingent consideration on acquired businesses has been reclassified from other current liabilities to its own respective line item.

Cash Equivalents

Cash equivalents consist of money market accounts and other highly liquid investments purchased with an original maturity of three months or less. The carrying amounts approximate fair value due to the short maturities of these investments. We maintain our cash and cash equivalents in bank accounts which, at times, may exceed federally insured limits. We have not experienced any losses in such accounts.

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

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 when available. We obtain relevant information from our investment advisor and, if warranted, also may review the financial solvency of certain security issuers.

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

Accounts Receivable

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

Inventories

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

Property, Equipment and Improvements, Net

Property, equipment and improvements are carried at cost, net of accumulated depreciation. Depreciation is provided by charges to operations using the straight-line method over the estimated asset useful lives. Furniture and fixtures, purchased software and other equipment are depreciated over a period of three to seven years. Building improvements and buildings are depreciated over ten and thirty-nine years, respectively (see Note 6 to the Consolidated Financial Statements for regarding Assets held for sale at September 30, 2018).

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 twelve 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 cash flow valuation technique using 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 2018, 2017 or 2016.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Goodwill

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

We have two reportable operating segments, our IoT Solutions segment and our IoT Products & Services segment (see Note 5 to the Condensed Consolidated Financial Statements). As a result, we concluded that the IoT Solutions segment and the IoT Products & Services segment constitute separate reporting units for purposes of the ASC 350-20-35 "Goodwill Measurement of Impairment" assessment and both units were tested individually for impairment.

Our test for potential goodwill impairment is a two-step approach. First, we estimate the fair values for each reporting unit by comparing the fair value to the carrying value. If the carrying value of the reporting unit exceeds its estimated fair value, then we conduct the second step, which requires us to measure the amount of the impairment loss. The impairment loss, if any, is calculated by comparing the implied fair value of the goodwill to its carrying amount. To calculate the implied fair value of goodwill, the fair value of the reporting unit’s assets and liabilities, excluding goodwill, is estimated. The excess of the fair value of the reporting unit over the amount assigned to its assets and liabilities, excluding goodwill, is the implied fair value of the reporting unit’s goodwill.

At June 30, 2018, we had a total of $104.6 million of goodwill on our Condensed Consolidated Balance Sheet for the IoT Products & Services reporting unit and the implied fair value of this reporting unit exceeded its carrying value by approximately 36%. At June 30, 2018, we had a total of $50.0 million of goodwill on our Condensed Consolidated Balance Sheet for the Solutions reporting unit and the implied fair value of this reporting unit exceeded its carrying value by approximately 7%. Based on that data, we concluded that no impairment was indicated for either reporting unit and we were not required to complete the second step of the goodwill impairment analysis. No goodwill impairment charges were recorded. During the fourth quarter of fiscal 2018, we assessed various qualitative factors to determine whether or not an additional goodwill impairment assessment was required as of September 30, 2018, and we concluded that no additional impairment assessment was required.

Implied fair values, for both reporting units were each calculated on a standalone basis using a weighted combination of the income approach and market approach.

The income approach indicates the fair value of a business based on the value of the cash flows the business or asset can be expected to generate in the future. A commonly used variation of the income approach used to value a business is the discounted cash flow (“DCF”) method. The DCF method is a valuation technique in which the value of a business is estimated on the earnings capacity, or available cash flow, of that business. Earnings capacity represents the earnings available for distribution to stockholders after consideration of the reinvestment required for future growth. Significant judgment is required to estimate the amount and timing of future cash flows for each reporting unit and the relative risk of achieving those cash flows.

The market approach indicates the fair value of a business or asset based on a comparison of the business or asset to comparable publicly traded companies or assets and transactions in its industry as well as prior company or asset transactions. This approach can be estimated through the guideline company method. This method indicates fair value of a business by comparing it to publicly traded companies in similar lines of business. After identifying and selecting the guideline companies, we make judgments about the comparability of the companies based on size, growth rates, profitability, risk, and return on investment in order to estimate market multiples. These multiples are then applied to the reporting units to estimate a fair value.

The implied fair values of each reporting unit were added together to get an indicated value of total equity to which a range of indicated value of total equity was derived. This range was compared to the total market capitalization of $359.6 million as of June 30, 2018, which implied a range of control premiums of 5.7% to 16.4%. This range of control premiums fell below the control premiums observed in the last five years in the communications equipment industry. As a result, the market capitalization reconciliation analysis proved support for the reasonableness of the fair values estimated for each individual reporting unit.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Should the facts and circumstances surrounding our assumptions change, the first step of our goodwill impairment analysis may fail. Assumptions and estimates to determine fair values are complex and often subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts. For example, if our future operating results do not meet current forecasts or if we experience a sustained decline in our market capitalization that is determined to be indicative of a reduction in fair value of one or more of our reporting units, we may be required to record future impairment charges for goodwill. An impairment could have a material effect on our consolidated balance sheet and results of operations. We have not had a goodwill impairment loss since the adoption of ASC 350, Intangibles-Goodwill and Other, in fiscal 2003.

Contingent Consideration

We measure our contingent consideration liabilities recognized in connection with business combinations at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy as defined in ASC 820 "Fair Value Measurement". We used a probability-weighted discounted cash flow approach as a valuation technique to determine the fair value of the contingent consideration on the acquisition date. At each subsequent reporting period, the fair value is re-measured with the change in fair value recognized in general and administrative expense and interest expense in our Condensed Consolidated Statements of Operations. Amounts, if any, paid to the seller in excess of the amount recorded on the acquisition date will be classified as cash flows used in operating activities. Payments to the seller not exceeding the acquisition-date fair value of the contingent consideration will be classified as cash flows used in financing activities.

Warranties

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

We also warrant our software or firmware incorporated into our products generally for a period of one year and offer to provide a bug fix or software patch within a reasonable period. We have not accrued specifically for this warranty and have not had claims specifically related to the software.

Treasury Stock

We record treasury stock at cost. Treasury stock includes shares purchased from employees for tax withholding purposes related to vesting of restricted stock awards.

Revenue Recognition

We recognize revenue in accordance with authoritative guidance issued by Financial Accounting Standards Board ("FASB") related to revenue recognition.

Hardware product revenue as a percentage of total revenue was 83.7%, 91.7% and 96.6% in fiscal 2018, 2017 and 2016, 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.

Services and solutions revenue as a percentage of total revenue represented 16.3%, 8.3% and 3.4% in fiscal 2018, 2017 and 2016, respectively. Our services and solutions revenue is derived primarily from our Digi Wireless Design Services and our SmartSense by Digi^™. Our SmartSense by Digi^™ revenue includes subscription revenue, support and equipment. Our

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

equipment and implementation fees are recorded as a sale up–front due to these items having stand–alone value to the customer because the customer can utilize our equipment with other monitoring services or use our monitoring services with hardware purchased from other vendors. Our installation charges are recorded when the product is installed. Our subscription revenue is recorded on a monthly basis. These subscriptions are generally for one year, but can be as long as five years, and may contain an evergreen renewal provision. Generally, our subscription renewal charges per month are the same as the original contract term. We also have some service revenue that is derived from our Digi Remote Manager^®, which is a platform-as-a-service (PaaS) offering in which customers pay for services consumed in terms of devices being managed and monitored, or as a monthly service fee for access to information. In addition, we recognize small amounts of revenue from our Digi Support Services which is recognized over the life of the contract, and training as the services are performed. We recognize revenue from our Digi Wireless Design Services, SmartSense by Digi^™ and Digi Remote Manager^® based upon performance, including final product delivery and customer acceptance.

Research and Development

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

Income Taxes

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

Stock-Based Compensation

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

Foreign Currency Translation

Financial position and results of operations of our international subsidiaries are measured using local currencies as the functional currency, except for our Singapore location which uses the U.S. Dollar as its functional currency. Assets and liabilities of these operations are translated at the exchange rates in effect at the end of each reporting period. For our larger international subsidiaries, statements of operations accounts are translated at the daily rate. For all other international subsidiaries, our statements of operations accounts are translated at the weighted average rates of exchange prevailing during each reporting period. Translation adjustments arising from the use of differing currency exchange rates from period to period are included in accumulated other comprehensive loss in stockholders’ equity. Gains and losses on foreign currency exchange transactions, as well as translation gains or losses on transactions denominated in currencies other than an entity’s functional currency, are reflected in the statement of operations. During both fiscal 2018 and 2017 there were net transaction gains of $0.1 million, and during fiscal 2016, there were net transaction losses of $(0.7) million that were recorded in other income (expense), net. We manage our net asset or net liability position for U.S. dollar accounts in our foreign locations to reduce our foreign currency risk. We have not implemented a formal hedging strategy.

Use of Estimates and Risks and Uncertainties

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates that could significantly affect

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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, contingent consideration and other contingencies.

Comprehensive Income

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

Net Income Per Common Share

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

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



	Fiscal years ended September 30,
	2018		2017		2016
Numerator:
Income from continuing operations	$	1,303	$	9,366	$	13,478
Income from discontinued operations, after income taxes	$	—	$	—	$	3,230
Net income	$	1,303	$	9,366	$	16,708
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	27,083		26,432		25,760
Effect of dilutive securities:
Stock options and restricted stock units	569		667		551
Denominator for diluted net income per common share — adjusted weighted average shares	27,652		27,099		26,311

Basic net income per common share:
Continuing operations	$	0.05	$	0.35	$	0.52
Discontinued operations	$	—	$	—	$	0.13
Net income	$	0.05	$	0.35	$	0.65
Diluted net income per common share:
Continuing operations	$	0.05	$	0.35	$	0.51
Discontinued operations	$	—	$	—	$	0.12
Net income (1)	$	0.05	$	0.35	$	0.64

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

Because their effect would be anti-dilutive at period end, certain potentially dilutive shares related to stock options to purchase common shares were excluded in the above computation of diluted earnings per share because the options’ exercise prices were greater than the average market price of our common shares. At September 30, 2018, 2017 and 2016, such excluded stock options were 925,063, 1,142,322 and 1,519,691, respectively.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Developments

Adopted

In March 2016, the FASB issued Accounting Standards Updated (“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. We adopted ASU 2016-09 on October 1, 2017. There was no material impact on our condensed consolidated financial statements.

Below is a summary of the impact upon adoption of ASU 2016-09:

•

In accordance with ASU 2016-09, beginning on October 1, 2017, we prospectively recorded excess tax benefits/deficiencies as an income tax benefit/expense in the statement of operations. This resulted in a $0.6 million tax deficiency in the twelve months ended September 30, 2018, resulting in an unfavorable impact to EPS of $0.02 per diluted share. This amount was recognized as a discrete item within income tax expense in the condensed consolidated statement of operations.


•	We adjusted our dilutive shares to remove the excess tax benefits from the calculation of EPS on a prospective basis beginning October 2, 2017. The revised calculation is more dilutive, but did not have a material impact on the Company’s diluted EPS calculation for the three months ended December 31, 2017.


•	Further, we had no tax benefits that were not previously recognized because the related tax deduction had not reduced taxes payable, therefore, there was no cumulative-effect adjustment to our beginning retained earnings on October 1, 2017.


•	Additionally, we prospectively adopted the provision to classify excess tax benefits and deficiencies within cash flows from operating activities as part of cash payments for taxes on the statement of cash flows. Prior periods on the statement of cash flows have not been adjusted.


•	Upon adoption of ASU 2016-09, we account for forfeitures as they occur, rather than estimating forfeitures as of an awards grant date. This change in accounting policy election was adopted using a modified retrospective transition method and on October 1, 2017, we recognized a cumulative effect unfavorable adjustment to retained earnings of approximately $33,000.


•	We have previously shown separately, tax payments made on behalf of an employee by repurchasing shares of stock as cash outflows from financing activities on the statement of cash flows. This provision was retrospectively adopted, and prior period cash flows already conformed with this presentation.

In July 2015, FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory." This provision would require inventory that was previously recorded using first-in, first-out (FIFO) to be recorded at lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those years. We adopted this guidance beginning October 1, 2017. The amendments in this guidance should be applied prospectively with earlier application permitted as of the beginning of an interim or annual period. The adoption of ASU 2015-11 did not have a material impact on our consolidated financial statements.

Not Yet Adopted

In May 2014, FASB issued ASU 2014-09, "Revenue from Contracts with Customers." This standard requires that revenue is recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The FASB has issued several amendments to the standard, including clarifications on disclosure of prior-period performance obligations and remaining performance obligations.

The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospectively method). We elected to adopt the standard effective October 1, 2018 using the full retrospective method to restate each prior reporting period presented.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The most significant impact of the standard relates to our accounting for nonrefundable upfront fees related to implementation and related equipment cost which will be recognized over the expected useful life of the equipment. In addition, the standard requires the deferral of certain contract costs which will be amortized over the term of the initial and expected renewal periods of the contract. We will amortize these costs over the calculated average expected life of the pool of contracts closed during the period. We will elect the practical expedient and not capitalize commissions for contracts with cost amortization periods of one year or less.

The adoption of the standard related to the new revenue recognition is expected to impact our reported results as follows:



	Fiscal year ended September 30, 2018
(in thousands, except per common share data)	As Reported		Impact of Adoption			As Adjusted
Revenue:
Hardware product	$	191,050	$	—		$	191,050
Services and solutions	37,316		(1,473		)	35,843
Total revenue	228,366		(1,473		)	226,893
Cost of sales:
Cost of hardware product	96,332		—			96,332
Cost of services and solutions	20,280		(1,644		)	18,636
Amortization	2,871		—			2,871
Total cost of sales	119,483		(1,644		)	117,839
Gross profit	108,883		171			109,054
Operating expenses	106,561		(289		)	106,272
Operating income	2,322		460			2,782
Net income	$	1,303	$	328		$	1,631
Diluted earnings per share	$	0.05	$	0.01		$	0.06



	Fiscal year ended September 30, 2017
(in thousands, except per common share data)	As Reported		Impact of Adoption			As Adjusted
Revenue:
Hardware product	$	166,480	—			$	166,480
Services and solutions	15,154		(294		)	14,860
Total revenue	181,634		(294		)	181,340
Cost of sales:
Cost of hardware product	85,369		—			85,369
Cost of services and solutions	7,647		(353		)	7,294
Amortization	1,444		—			1,444
Total cost of sales	94,460		(353		)	94,107
Gross profit	87,174		59			87,233
Operating expenses	78,367		—			78,367
Operating income	8,807		59			8,866
Net income	$	9,366	37			$	9,403
Diluted earnings per share	$	0.35	$	—		$	0.35

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



	September 30, 2018
(in thousands)	As Reported		Impact of Adoption			As Adjusted
Accounts receivable, net	$	50,817	$	(998	)	$	49,819
Other current assets	$	2,613	$	885		$	3,498
Deferred tax assets	$	6,665	$	(65	)	$	6,600
Other non-current assets	$	1,291	$	1,199		$	2,490
Other current liabilities	$	2,413	$	598		$	3,011
Other non-current liabilities	$	510	$	210		$	720
Stockholders' equity	$	330,280	$	213		$	330,493



	September 30, 2017
(in thousands)	As Reported		Impact of Adoption			As Adjusted
Other current assets	$	3,032	$	172		$	3,204
Deferred tax assets	$	9,211	$	67		$	9,278
Other non-current assets	$	269	$	268		$	537
Other current liabilities	$	2,113	$	469		$	2,582
Other non-current liabilities	$	654	$	153		$	807
Stockholders' equity	$	319,144	$	(115	)	$	319,029

Adoption of the standards related to revenue recognition had no impact to cash from our used in operating, financing or investing on our consolidated statements of cash flows.

In May 2017, FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting." ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, which for us is the first quarter ending December 31, 2018. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact to our consolidated financial statements.

In March 2017, FASB issued ASU 2017-08, "Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities." The amendments in this update shorten the amortization period for certain callable debt securities that are held at a premium. The amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount, which would be amortized to maturity. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018, which for us is the first quarter ending December 31, 2019. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In January 2017, FASB issued ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." ASU 2017-04 eliminates the second step in the goodwill impairment test which requires an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The standard, which should be applied prospectively, is effective for fiscal years beginning after December 15, 2019, which for us is our fiscal year ending September 30, 2021. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2017-04 on our consolidated financial statements.

In August 2016, FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments." The amendments in this update provide guidance on eight specific cash flow issues, thereby reducing the diversity in practice in how certain transaction are classified in the statement of cash flows. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2017, which for us is the first quarter ending

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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, FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments." The amendments in this update replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019, which for us is the first quarter ending December 31, 2020. Entities may early adopt beginning after December 15, 2018. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

In 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.

Acquisition

12 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

ACQUISITION

ACQUISITIONS

Fiscal 2018 Acquisitions

Acquisition of Accelerated Concepts, Inc.

On January 22, 2018, we purchased all the outstanding stock of Accelerated Concepts, Inc. (“Accelerated”), a Tampa-based provider of secure, enterprise-grade, cellular (LTE) networking equipment for primary and backup connectivity applications. This acquisition is included with our IoT Products and Services segment.

The terms of the acquisition include an upfront cash payment together with future earn-out payments. Cash of $16.4 million (excluding cash acquired of $0.2 million) was paid. The earn-out payments are scheduled to be paid in two installments and the payment amount, if any, will be calculated based on the revenue performance of Accelerated products. The first installment will be based on revenues from January 22, 2018 through January 21, 2019 (the “2018 period”) and the second installment will be based on revenues from January 22, 2019 through January 21, 2020 (the “2019 period”). The cumulative amount of these earn-outs will be $4.5 million if certain revenue thresholds are met. Additional payments, not to exceed $2.0 million for both installments, may also be due depending on revenue performance. The fair value of this contingent consideration was $2.3 million at the date of acquisition and $4.4 million at September 30, 2018 (see Note 8 to the Consolidated Financial Statements). We have determined that the fair value of the earn-out on the acquisition date will be considered as part of the purchase price consideration as there are no continuing employment requirements associated with the earn-out.

The purchase price was allocated to the estimated fair value of assets and liabilities assumed. The purchase price allocation resulted in the recognition of $5.7 million of goodwill. For tax purposes, this acquisition is treated as a stock acquisition, therefore, the goodwill is not deductible. We believe this is a complementary acquisition for us as it significantly enhances our existing cellular product lines and immediately extends our market reach with a line of commercial routers and network

2. ACQUISITIONS (CONTINUED)

appliance products. This acquisition will further enhance and expand the capabilities of the IoT Products and Services segment (see Note 5 to our Consolidated Financial Statements).

The Accelerated acquisition has been accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed pursuant to the purchase agreement be recognized at fair value as of the acquisition date.

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



Cash	$	16,430
Fair value of contingent consideration on acquired business	2,300
Total purchase price consideration	$	18,730

Fair value of net tangible assets acquired	$	766
Fair value of identifiable intangible assets acquired:
Customer relationships	6,500
Purchased and core technology	3,000
Trade name and trademarks	1,000
Order backlog	1,800
Goodwill	5,664
Total	$	18,730

Operating results for Accelerated after January 22, 2018 are included in our Consolidated Statements of Operations. The Consolidated Balance Sheet as of September 30, 2018 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 net working capital values were finalized during the fourth quarter of fiscal 2018.

The weighted average useful life for all the identifiable intangibles listed above is 5.5 years. For purposes of determining fair value, the purchased and core technology identified above is assumed to have a useful life of five years, the customer relationships are assumed to have useful lives of seven years, the trade name and trademarks are assumed to have useful lives of five years and the order backlog is assumed to have a useful life of one year. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets.

The amounts of revenue and net income included in the Consolidated Statements of Operations from the acquisition date of January 22, 2018 were $22.2 million and $2.8 million, respectively. Costs directly related to the acquisition of $0.3 million incurred in fiscal 2018 have been charged directly to operations and are included in general and administrative expense in our Consolidated Statements of Operations. These acquisition costs include legal, accounting and valuation fees.

Acquisition of TempAlert LLC

On October 20, 2017, we purchased all the outstanding interests of TempAlert LLC (“TempAlert”), a Boston-based provider of automated, real-time temperature monitoring and task management solutions. The purchase price was $45.0 million in cash adjusted for certain net working capital adjustments. We believe this is a complementary acquisition for us as the acquired technology will continue to be supported to further enhance and expand the capabilities of the IoT Solutions segment (see Note 5 to our Consolidated Financial Statements).

The terms of the acquisition included an upfront cash payment together with future earn-out payments. Cash of $40.7 million (excluding cash acquired of $0.6 million) was paid at the time of closing. The earn-out payments are scheduled to be paid after December 31, 2018 and December 31, 2019 which is the end of the earn-out periods. The cumulative amount of these earn-outs for the periods ended December 31, 2018 and 2019, will not exceed $35.0 million and $45.0 million, respectively. The fair value of this contingent consideration was zero at the date of acquisition and at September 30, 2018 (see Note 8 to the Consolidated Financial Statements).

2. ACQUISITIONS (CONTINUED)

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 $17.6 million of goodwill. For tax purposes, this acquisition is treated as an asset acquisition, therefore the goodwill is deductible. We believe that the acquisition resulted in the recognition of goodwill because this is a complementary acquisition for us and will provide a source of recurring revenue in a new vertically focused solutions business.

The TempAlert acquisition has been accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed pursuant to the purchase agreement be recognized at fair value as of the acquisition date.

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



Cash	$	40,741
Fair value of contingent consideration on acquired business	—
Total purchase price consideration	$	40,741

Fair value of net tangible assets acquired	$	(1,111	)
Fair value of identifiable intangible assets acquired:
Customer relationships	18,300
Purchased and core technology	4,000
Trade name and trademarks	2,000
Goodwill	17,552
Total	$	40,741

Operating results for TempAlert after October 20, 2017 are included in our Consolidated Statements of Operations. The Consolidated Balance Sheet as of September 30, 2018 reflects the preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The net working capital values are preliminary, and we expect to finalize them in the first half of fiscal 2019.

The weighted average useful life for all the identifiable intangibles listed above is 6.5 years. For purposes of determining fair value, the purchased and core technology identified above is assumed to have a useful life of five years, the customer relationships are assumed to have useful lives of seven years and the trade name and trademarks are assumed to have useful lives of five years. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets.

The amount of revenue included in the Consolidated Statements of Operations from the acquisition date of October 20, 2017 was $17.0 million. Costs directly related to the acquisition of $1.4 million incurred in fiscal 2018 and $0.4 million incurred in fiscal 2017 have been charged directly to operations and are included in general and administrative expense in our Consolidated Statements of Operations. These acquisition costs include legal, accounting, valuation and success fees.

Pro Forma Financial Information (unaudited)

The following consolidated pro forma information is as if the Accelerated and TempAlert acquisitions had occurred on October 1, 2016 (in thousands):



	Fiscal years ended September 30,
	2018		2017
Revenue	$	233,789	$	213,505
Net income	$	1,314	$	4,117

Pro forma net income was adjusted to exclude interest expense related to debt that was paid off prior to acquisition, interest income related to promissory note that was settled prior to acquisition, adjust amortization to the fair value of the intangibles acquired and remove any costs associated with the sale transaction.

2. ACQUISITIONS (CONTINUED)

Fiscal 2017 Acquisitions

Acquisition of SMART Temps^®, LLC

On January 9, 2017, we purchased all of the outstanding interests of SMART Temps^®, LLC ("SMART Temps^®"), an Indiana-based provider of real-time temperature management for pharmacies, education, and hospital settings as well as real-time temperature management for blood bank, laboratory environments, restaurants, and grocery. We believe this is a complementary acquisition for us as the acquired technology will continue to be supported to further enhance our portfolio of products for the IoT Solutions segment (see Note 5 to our Consolidated Financial Statements).

The terms of the acquisition included an upfront cash payment together with future earn-out payments. Cash of $28.8 million (excluding cash acquired of $0.5 million) was paid at time of closing. The earn-out payments were scheduled to be paid after December 31, 2017 which is the end of the earn-out period. The cumulative amount of those earn-out payments could not exceed $7.2 million. We determined that the earn-out would be considered as part of the purchase price consideration because there were no continuing employment requirements associated with the earn-out. The fair value of this contingent consideration was $10,000 at the date of acquisition and zero at December 31, 2017, therefore no earn-out was paid (see Note 8 to the Consolidated Financial Statements).

The purchase price was allocated to the estimated fair value of assets acquired and liabilities assumed. The final purchase price allocation resulted in the recognition of $18.8 million of goodwill. For tax purposes, this acquisition is treated as an asset acquisition, therefore the goodwill is deductible. We believe that the acquisition resulted in the recognition of goodwill because this is a complementary acquisition for us and will provide a source of recurring revenue in a new vertically focused IoT Solutions segment. Operating results for SMART Temps^® are included in our Consolidated Statements of Operations from January 9, 2017.

Acquisition of FreshTemp^®, LLC

On November 1, 2016, we purchased all of the outstanding interests of FreshTemp^®, LLC (FreshTemp^®), a Pittsburgh-based provider of temperature monitoring and automated task management solutions for the food industry. We believe this is a complementary acquisition for us as the acquired technology will continue to be supported to create an advanced portfolio of products for the IoT Solutions segment.

The terms of the acquisition included an upfront cash payment together with future earn-out payments and a holdback amount. Cash of $1.7 million was paid at time of closing. The earn-out payments are based on revenue related to certain customer contracts entered into by June 30, 2017. The fair value of this contingent consideration was $1.3 million at the date of acquisition and $0.2 million at September 30, 2018 (see Note 8 to the Consolidated Financial Statements). The final calculation date was on June 30, 2018. The cumulative amount of these earn-out payments could not exceed $2.3 million. We determined that the earn-out would be considered as part of the purchase price consideration as there was no continuing employment requirements associated with the earn-out.

The purchase price was allocated to the estimated fair value of assets acquired and liabilities assumed. The purchase price allocation resulted in the recognition of $2.7 million of goodwill. For tax purposes, this acquisition is treated as an asset acquisition, therefore the goodwill is deductible. We believe that the acquisition resulted in the recognition of goodwill because this is a complementary acquisition for us and will provide a source of recurring revenue in a new vertically focused solutions business. Operating results for FreshTemp^® are included in our Consolidated Statements of Operations from November 2, 2016.

Fiscal 2016 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 formed the basis for our IoT Solutions segment.

The terms of the acquisition included an upfront cash payment together with earn-out payments. Cash of $2.9 million was paid at time of closing. The earn-out payments are scheduled to be paid in installments over a four-year period based on revenue achievement of the acquired business. Each of the earn-out payments will be calculated based on the revenue performance of

2. ACQUISITIONS (CONTINUED)

the IoT Solutions segment for each respective earn-out period. The cumulative amount of these earn-out payments will not exceed $11.6 million. An additional payment, not to exceed $3.5 million, may also be due depending on revenue performance.

The fair value of this contingent consideration was $10.4 million at the date of acquisition and $5.5 million at September 30, 2018 (see Note 8 to the Consolidated Financial Statements). We determined that the earn-out would be considered as part of the purchase price consideration as there was no continuing employment requirements associated with the earn-out.

The purchase price was allocated to the estimated fair value of assets acquired and liabilities assumed. The purchase price allocation resulted in the recognition of $11.0 million of goodwill. We believe that the acquisition resulted in the recognition of goodwill because this is a complementary acquisition for us and will provide a source of recurring revenue in a new vertically focused solutions business. Operating results for Bluenica are included in our Consolidated Statements of Operations from October 6, 2015.

Discontinued Operations Discontinued Operations

12 Months Ended

Sep. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

On October 23, 2015, we sold all the outstanding stock of our wholly owned subsidiary, Etherios, to West Monroe Partners, LLC. We sold Etherios as part of a strategy to focus on providing highly reliable machine connectivity solutions for business and mission-critical application environments. Etherios was included in our single operating segment prior to fiscal 2017. The terms of the sale agreement provide that West Monroe Partners LLC will pay us $3.0 million on October 23, 2016 and $2.0 million on October 23, 2017. The present value of these amounts was included within the total fair value of consideration received. These receivable amounts were unsecured and non-interest bearing. We received $3.0 million in October 2016. We received the second installment of $2.0 million in October 2017.

Goodwill was included in the net assets of Etherios based on the relative fair value of Etherios compared to the fair value of the Company, as the Company consisted of a single reporting unit for goodwill impairment testing purposes at the time of disposal.

As a condition to the sale agreement, we retained the operating leases in the Dallas and Chicago locations. Digi ceased using these facilities in October 2015 and has sublet the Dallas location to West Monroe Partners, LLC through December 31, 2018. In January 2017, we signed an early-termination agreement along with an immaterial payment to exit our Chicago lease. Also, in connection with the sale, we assigned our San Francisco lease to West Monroe Partners, LLC.

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



	Fiscal year ended September 30,
	2016
Service revenue	$	891
Cost of service	713
Gross profit	178
Operating expenses:
Sales and marketing	148
Research and development	103
General and administrative	43
Total operating expenses	294
Loss from discontinued operations, before income taxes	(116		)
Gain on sale of discontinued operations, before income taxes	2,870
Income from discontinued operations, before income taxes	2,754
Income tax benefit on discontinued operations	(476		)
Income from discontinued operations, after income taxes	$	3,230

Income tax benefit on discontinued operations for the twelve months ended September 30, 2016 was $0.5 million, which primarily represented income tax benefits for deductible transaction costs, partially offset by a tax expense for equity awards for which we will not receive a tax deduction. For tax purposes, this transaction resulted in a capital loss, as the tax basis of the

3. DISCONTINUED OPERATIONS (CONTINUED)

Etherios stock was higher than the book basis of the assets that were sold. Since we do not expect to be able to utilize this capital loss in the five-year carryforward period, a deferred tax asset offset by a full valuation allowance was recorded in the third quarter of fiscal 2016 upon completion of the capital loss calculation.

The following table presents amortization of the discontinued operations related to Etherios (in thousands):



	Fiscal year ended September 30,
	2016
Amortization of identifiable intangible assets	$	30

Goodwill and other Identifiable Intangible Assets

12 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS, NET

Identifiable Intangible Assets, Net

Amortizable identifiable intangible assets, net as of September 30, 2018 and 2017 were comprised of the following (in thousands):



	September 30, 2018							September 30, 2017
	Gross carrying amount		Accum. amort.			Net		Gross carrying amount		Accum. amort.			Net
Purchased and core technology	$	58,102	$	(48,693	)	$	9,409	$	51,292	$	(46,304	)	$	4,988
License agreements	102		(46		)	56		18		(17		)	1
Patents and trademarks	15,701		(12,242		)	3,459		12,484		(11,280		)	1,204
Customer relationships	46,605		(21,049		)	25,556		21,914		(16,817		)	5,097
Non-compete agreements	600		(210		)	390		600		(90		)	510
Order backlog	1,800		(1,350		)	450		—		—			—
Total	$	122,910	$	(83,590	)	$	39,320	$	86,308	$	(74,508	)	$	11,800

Amortization expense is included in our consolidated statement of operations in cost of sales and general and administrative expense. Amortization expense in cost of sales includes amortization for purchased and core technology and certain patents and trademarks. Amortization expense for fiscal years 2018, 2017 and 2016 was as follows (in thousands):



Fiscal year	Total
2018	$	9,435
2017	$	2,597
2016	$	1,842

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



Fiscal year	Total
2019	$	8,888
2020	$	8,118
2021	$	7,422
2022	$	6,554
2023	$	4,362

4. GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS, NET (CONTINUED)

Goodwill

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



	Fiscal years ended September 30,
	2018			2017
Beginning balance, October 1	$	131,995		$	109,448
Acquisitions	23,216			21,465
Foreign currency translation adjustment	(676		)	1,082
Ending balance, September 30	$	154,535		$	131,995

Segment Information and Major Customers

12 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

SEGMENT INFORMATION AND MAJOR CUSTOMERS

We have two reportable operating segments for purposes of ASC 280-10-50 “Segment Reporting”: (i) IoT Products & Services (formerly "M2M") segment, and (ii) IoT Solutions (formerly "Solutions") segment. This determination was made by considering both qualitative and quantitative information. The qualitative information included, but was not limited to, the following: the nature of the products and services and customers differ between the two segments, the Chief Operating Decision Maker ("CODM") is reviewing both segments’ operating results separately and makes decisions about the allocation of resources, and discrete financial information is available through operating income (loss) for both segments. Our segments are described below:

IoT Products & Services

Our IoT Products & Services segment is composed of the following communications products and development services:


•	Cellular routers and gateways;


•	Radio frequency ("RF") which include our Digi XBee^® modules as well as other RF solutions;


•	Embedded products include Digi Connect^® and Rabbit^® embedded systems on module and single board computers;


•	Network products, which has the highest concentration of mature products, including console and serial servers and USB connected products;


•	Digi Wireless Design Services;


•	Digi Remote Manager^®; and


•	Digi Support Services which offers various levels of technical services for development assistance, consulting and training.

IoT Solutions

We measure our segment results primarily by reference to revenue and operating income. IoT Solutions revenue includes both product and service revenue. Certain costs incurred at the corporate level are allocated to our segments. These costs include information technology, employee benefits and shared facility services. The information technology and shared facility costs are allocated based on headcount and the employee benefits costs are allocated based on compensation costs.

5. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED)

Summary operating results for each of our segments were as follows (in thousands):



	Fiscal years ended September 30,
	2018			2017			2016
Revenue
IoT Products & Services	$	201,506		$	174,237		$	202,294
IoT Solutions	26,860			7,397			711
Total revenue	$	228,366		$	181,634		$	203,005
Operating income (loss)
IoT Products & Services	$	14,923		$	12,804		$	18,822
IoT Solutions	(12,601		)	(3,997		)	(1,717		)
Total operating income	$	2,322		$	8,807		$	17,105
Depreciation and amortization
IoT Products & Services	$	6,040		$	3,575		$	4,040
IoT Solutions	6,230			1,922			544
Total depreciation and amortization	$	12,270		$	5,497		$	4,584

Total expended for property, plant and equipment was as follows (in thousands):



	Fiscal years ended September 30,
	2018		2017		2016
IoT Products & Services	$	1,773	$	1,738	$	2,641
IoT Solutions	69		35		88
Total expended for property, plant and equipment	$	1,842	$	1,773	$	2,729

Total assets for each of our segments were as follows (in thousands):



	As of September 30,
	2018		2017
IoT Products & Services	$	209,574	$	182,555
IoT Solutions	98,801		47,644
Unallocated*	62,750		114,990
Total assets	$	371,125	$	345,189

*Unallocated consists of cash and cash equivalents, current marketable securities and long-term marketable securities.

Total goodwill for each of our segments were as follows (in thousands):



	As of September 30,
	2018		2017
IoT Products & Services	$	104,358	$	98,981
IoT Solutions	50,177		33,014
Total goodwill	$	154,535	$	131,995

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



	As of September 30,
	2018		2017
United States	$	6,156	$	12,648
International, primarily Europe	114		153
Total net property, equipment and improvements	$	6,270	$	12,801

5. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED)

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



	Fiscal years ended September 30,
	2018		2017		2016
North America, primarily United States	$	163,397	$	117,749	$	131,457
Europe, Middle East & Africa	39,211		39,403		44,932
Asia	20,881		19,892		20,390
Latin America	4,877		4,590		6,226
Total revenue	$	228,366	$	181,634	$	203,005

Our U.S. export sales represented 29.9%, 37.1% and 38.7% of revenue for the fiscal years ended September 30, 2018, 2017 and 2016. No single customer exceeded 10% of revenue for any of the periods presented. At September 30, 2018, we had one customer, whose accounts receivable balance represented 12.0% of total accounts receivable. No single customer exceeded 10% of total accounts receivable at September 30, 2017.

Selected Balance Sheet Data

12 Months Ended

Sep. 30, 2018

Selected Balance Sheet Data [Abstract]

SELECTED BALANCE SHEET DATA

(in thousands)



	As of September 30,
	2018		2017
Accounts receivable, net:
Accounts receivable	$	54,451	$	31,365
Less allowance for doubtful accounts	1,074		341
Less reserve for future returns and pricing adjustments	2,560		2,169
Total accounts receivable, net	$	50,817	$	28,855

Inventories:
Raw materials	$	22,047	$	24,050
Work in process	525		484
Finished goods	19,072		5,704
Total inventories	$	41,644	$	30,238

Property, equipment and improvements, net:
Land	$	570	$	1,800
Buildings	2,338		10,522
Improvements	1,698		3,445
Equipment	15,803		17,133
Purchased software	3,966		3,571
Furniture and fixtures	3,350		3,473
Total property, equipment and improvements, gross	27,725		39,944
Less accumulated depreciation and amortization	21,455		27,143
Total property, equipment and improvements, net	$	6,270	$	12,801

At September 30, 2018 there was $5.2 million of assets held for sale on our Consolidated Balance Sheet, which consist of land, buildings and improvements related to our Minnetonka, Minnesota headquarters. On October 2, 2018, we sold our corporate headquarters building to Minnetonka Leased Housing Associates II, LLLP (see Note 18 to our Consolidated Financial Statements).

Marketable Securities

12 Months Ended

Sep. 30, 2018

Marketable Securities [Abstract]

MARKETABLE SECURITIES

Our marketable securities may consist of certificates of deposit, commercial paper, corporate bonds and government municipal bonds.

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, 2018, all of our 19 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 mature in less than one year and our non-current marketable securities mature in less than two years. We received proceeds from the sale of our available-for-sale marketable securities of $32.0 million, $87.1 million and $73.7 million for fiscal 2018, 2017 and 2016, respectively.

At September 30, 2018 our marketable securities consisted of (in thousands):



	Amortized Cost (1)		Unrealized Gains		Unrealized Losses			Fair Value (1)
Current marketable securities:
Certificates of deposit	$	4,756	$	—	$	(20	)	$	4,736
Total marketable securities	$	4,756	$	—	$	(20	)	$	4,736


(1)	Included in amortized cost and fair value is purchased and accrued interest of $6.

At September 30, 2017 our marketable securities consisted of (in thousands):



	Amortized Cost (1)		Unrealized Gains		Unrealized Losses			Fair Value (1)
Current marketable securities:
Corporate bonds	$	28,275	$	—	$	(20	)	$	28,255
Certificates of deposit	3,756		4		—			3,760
Current marketable securities	32,031		4		(20		)	32,015
Non-current marketable securities:
Certificates of deposit	4,757		—		(4		)	4,753
Total marketable securities	$	36,788	$	4	$	(24	)	$	36,768


(1)	Included in amortized cost and fair value is purchased and accrued interest of $211.

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, 2018
	Less than 12 Months				More than 12 Months
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Certificates of deposit	$	—	$	—	$	4,736	$	(20	)
Total	$	—	$	—	$	4,736	$	(20	)

7. MARKETABLE SECURITIES (CONTINUED)



	September 30, 2017
	Less than 12 Months					More than 12 Months
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate bonds	$	26,196	$	(20	)	$	—	$	—
Certificates of deposit	3,751		(4		)	—		—
Total	$	29,947	$	(24	)	$	—	$	—

Fair Value Measurements

12 Months Ended

Sep. 30, 2018

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, 2018 using:
	Total carrying value at September 30, 2018		Quoted price in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Money market	$	24,318	$	24,318	$	—	$	—
Certificates of deposit	4,736		—		4,736		—
Total assets measured at fair value	$	29,054	$	24,318	$	4,736	$	—
Liabilities:
Contingent consideration on acquired business	$	10,065	$	—	$	—	$	10,065
Total liabilities measured at fair value	$	10,065	$	—	$	—	$	10,065

8. FAIR VALUE MEASUREMENTS (CONTINUED)



			Fair Value Measurements at September 30, 2017 using:
	Total carrying value at September 30, 2017		Quoted price in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Money market	$	39,524	$	39,524	$	—	$	—
Corporate bonds	28,255		—		28,255		—
Certificates of deposit	8,513		—		8,513		—
Total assets measured at fair value	$	76,292	$	39,524	$	36,768	$	—
Liabilities:
Contingent consideration on acquired business	$	6,388	$	—	$	—	$	6,388
Total liabilities measured at fair value	$	6,388	$	—	$	—	$	6,388

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 fiscal 2018.

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.

We are required to make contingent payments for our acquisitions. In connection with the October 2015 acquisition of Bluenica Corporation (“Bluenica”), we are required to make contingent payments over a period of up to four years, subject to achieving specified revenue thresholds for sales of Bluenica products. The fair value of the liability for contingent payments recognized upon acquisition was $10.4 million and was $5.5 million at September 30, 2018. We paid $0.5 million for the period ended September 30, 2016 and zero for the period ended September 30, 2017.

In connection with the November 2016 acquisition of FreshTemp^®, LLC (“FreshTemp^®”), we are required to make a contingent payment after June 30, 2018, for revenue related to specific customer contracts signed by June 30, 2017. The fair value of the liability recognized upon acquisition was $1.3 million and was $0.2 million at September 30, 2018. We have paid the $0.2 million in November 2018.

For the January 2017 acquisition of SMART Temps^® LLC (“SMART Temps^®”), we were required to make a contingent payment after December 31, 2017 based on achieving specified revenue thresholds. The fair value of the liability for contingent payments recognized upon acquisition of SMART Temps^® was $10,000. Since the revenue threshold was not met, no payment was made.

For the TempAlert acquisition, we are required to make contingent payments for the twelve month periods ending December 31, 2018 and December 31, 2019 based on the total Digi IoT Solutions segment revenue. The fair value of the liability for contingent payments recognized upon acquisition of TempAlert and at September 30, 2018 was zero.

For the Accelerated acquisition, we are required to make contingent payments for the twelve month periods ending January 21, 2019 and January 21, 2020, based upon specified revenue thresholds. The fair values of the liability for contingent payments recognized upon acquisition of Accelerated and at September 30, 2018 was $2.3 million and was $4.4 million, respectively. The increase is a result of Accelerated outperforming initial revenue expectations.

The fair values of these contingent payments were estimated by discounting to present value the probability-weighted contingent payments expected to be made. Assumptions used in these calculations include the discount rate and various probability factors. This liability is considered to be a Level 3 financial liability that is re-measured each reporting period as a charge or credit to general and administrative expense within the Consolidated Statements of Operations.

8. FAIR VALUE MEASUREMENTS (CONTINUED)

The following table presents a reconciliation of the contingent consideration liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):



	Fiscal years ended September 30,
	2018		2017
Fair value at beginning of period	$	6,388	$	9,960
Purchase price contingent consideration	2,300		1,310
Contingent consideration payments	—		(518		)
Change in fair value of contingent consideration	1,377		(4,364		)
Fair value at end of period	$	10,065	$	6,388

The change in fair value of contingent consideration relates to the acquisitions of Accelerated, Bluenica, FreshTemp^® and SMART Temps^® and is included in general and administrative expense. The change in fair value of contingent consideration reflects our estimate of the probability of achieving the relevant targets and is discounted based on our estimated discount rate. We have estimated the fair value of the contingent consideration based on the probability of achieving the specified revenue thresholds at 44.4% to 100.0% for Accelerated 98.6% for Bluenica, 100% for FreshTemp^® and 0% for SMART Temp. A significant increase (decrease) in our estimates of achieving the relevant targets could materially increase (decrease) the fair value of the contingent consideration liability.

Product Warranties Disclosures [Abstract]

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

+ References + Details

Product Warranty Obligation

12 Months Ended

Sep. 30, 2018

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
2018	$	987	$	759	$	(574	)	$	1,172
2017	$	1,033	$	679	$	(725	)	$	987
2016	$	1,014	$	771	$	(752	)	$	1,033

We also warrant our software or firmware incorporated into our products and offer to provide a bug fix or software patch within a reasonable period. We have not accrued specifically for this warranty and have not had claims specifically related to the software. 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, 2018

Restructuring and Related Activities [Abstract]

RESTRUCTURING

Below is a summary of the restructuring charges and other activity within the restructuring accrual all of which is included in our IoT Products & Services segment (in thousands):



	Manufacturing Transition			2017 Restructuring						2016 Restructuring
	Employee Termination Costs			Employee Termination Costs			Other			Employee Termination Costs			Other			Total
Balance at September 30, 2015	$	—		$	—		$	—		$	—		$	—		$	—
Restructuring charge	—			—			—			558			195			753
Payments	—			—			—			(559		)	(195		)	(754		)
Reversals	—			—			—			(6		)	—			(6		)
Foreign currency fluctuation	—			—			—			7			—			7
Balance at September 30, 2016	$	—		$	—		$	—		$	—		$	—		$	—
Restructuring charge	—			2,258			257			—			—			2,515
Payments	—			(845		)	(141		)	—			—			(986		)
Foreign currency fluctuation	—			115			12			—			—			127
Balance at September 30, 2017	$	—		$	1,528		$	128		$	—		$	—		$	1,656
Restructuring charge	504			—			—			—			—			504
Payments	(357		)	(1,035		)	(161		)	—			—			(1,553		)
Reversals	—			(244		)	42			—			—			(202		)
Foreign currency fluctuation	—			44			4			—			—			48
Balance at September 30, 2018	$	147		$	293		$	13		$	—		$	—		$	453

Manufacturing Transition

As announced on April 3, 2018, Digi will transfer the manufacturing functions of its Eden Prairie, Minnesota operations facility to existing contract manufacture suppliers. As a result, 51 positions in total have been eliminated, resulting in restructuring charges amounting to approximately $0.5 million related to employee costs during the third and fourth quarters of fiscal 2018. The payments associated with these charges are expected to be completed by December 31, 2018. This manufacturing transition is expected to result in total annualized savings of approximately $3.0 million to $5.0 million.

2017 Restructuring

In May 2017, we approved a restructuring plan primarily impacting our France location. We also eliminated certain employee costs in the U.S. The restructuring is a result of a decision to consolidate our France operations to our Europe, Middle East and Africa (EMEA) headquarters in Munich. The total restructuring charges amounted to $2.5 million that included $2.3 million of employee costs and $0.2 million of contract termination costs during the third quarter of fiscal 2017. These actions resulted in an elimination of 10 positions in the U.S. and 8 positions in France. The payments associated with these charges are expected to be completed during the first half of fiscal 2019.

2016 Restructuring

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

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

Income Taxes

12 Months Ended

Sep. 30, 2018

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,
	2018			2017		2016
United States	$	(2,887	)	$	5,170	$	9,841
International	5,677			4,321		6,849
Income from continuing operations, before income taxes	$	2,790		$	9,491	$	16,690

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



	Fiscal years ended September 30,
	2018			2017			2016
Current:
Federal	$	526		$	312		$	(141	)
State	57			165			139
Foreign	1,412			1,756			2,099
Deferred:
U.S.	(668		)	(1,454		)	1,260
Foreign	160			(654		)	(145		)
Income tax provision	$	1,487		$	125		$	3,212

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



	As of September 30,
	2018			2017
Non-current deferred tax asset	$	6,665		$	9,211
Non-current deferred tax liability	(334		)	(534		)
Net deferred tax asset	$	6,331		$	8,677

Uncollectible accounts and other reserves	$	1,000		$	1,063
Depreciation and amortization	(369		)	(673		)
Inventories	740			824
Compensation costs	3,388			5,863
Tax carryforwards	7,063			7,514
Valuation allowance	(3,291		)	(5,952		)
Identifiable intangible assets	(2,298		)	(581		)
Other	98			619
Net deferred tax asset	$	6,331		$	8,677

As of September 30, 2018, our estimated carryforwards for tax purposes are as follows: We have $3.6 million of tax carryforwards (net of reserves) related to federal and state research and development tax credits. We also have $3.5 million of carryforwards (net, tax effected) consisting of U.S. capital loss of $3.2 million and non-U.S. net operating losses of $0.3 million. The majority of our federal research and development tax credits have a 20-year carryforward period. The state research and development tax credits have a 15-year carryforward period. The majority of our non-U.S. net operating losses have an unlimited carryforward period. Our non-U.S. tax credit carryforwards will expire in 2032. Our U.S. capital loss carryforward will expire in 2020.

Our valuation allowance for certain U.S. and foreign locations was $3.3 million at September 30, 2018 and $6.0 million at September 30, 2017. The decrease is a result of expected tax capital gains in fiscal 2019 resulting from the sale of our corporate headquarters building (see Note 18 to the Consolidated Financial Statements). 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

11. INCOME TAXES (CONTINUED)

amounts of future taxable income. If 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,
	2018			2017			2016
Statutory income tax amount	$	1,001		$	2,917		$	5,548
Increase (decrease) resulting from:
State taxes, net of federal benefits	(312		)	(125		)	204
Manufacturing deduction	(364		)	(150		)	(450		)
Meal and entertainment	82			63			55
Transaction costs	79			—			—
Employee stock purchase plan	56			79			83
Foreign operations	(3		)	218			276
Valuation allowance - current year increase	275			159			(43		)
Utilization of tax credits	(1,609		)	(1,168		)	(1,116		)
Discrete items:
Valuation allowance	(1,317		)	—			—
Discrete tax benefits	(765		)	(954		)	(1,461		)
One-time transition tax	250			—			—
Deferred balance sheet remeasure	2,727			—			—
ASU 2016-09 excess stock compensation	643			—			—
Contingent consideration	388			(1,172		)	(154		)
Adjustment of tax contingency reserves	315			257			202
Other, net	41			1			68
Income tax provision	$	1,487		$	125		$	3,212

During fiscal 2018, net tax expense discrete to the period was $1.5 million, primarily as a result of $3.0 million tax expense related to new U.S. tax legislation that was enacted during the first quarter of fiscal 2018 and $0.6 million for the adoption of ASU 2016-09 related to the accounting for the tax effects of stock compensation (discussed below). This was offset partially by a net tax benefit of $1.3 million for the release of valuation allowances. The valuation allowance release consists of a $1.1 million release of a valuation allowance against U.S. federal capital loss carryforward due to expected capital gains tax in fiscal 2019 resulting from the sale of our corporate headquarters building in October 2018 (see Note 18 to the Consolidated Financial Statements). This expense is included within the discrete items in the above table.

The Tax Cuts and Jobs Act of 2017 (the “Act”) was enacted on December 22, 2017. The Act lowered the U.S. federal corporate tax rate from 35% to 21% as of January 1, 2018 and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred. Due to our fiscal year end, our statutory rate for fiscal 2018 will be a blend of the new and old tax rates. At September 30, 2018 we had not fully completed our accounting for the tax effects of enactment of the Act. However, in certain cases described below, we have made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. For the items for which we were able to determine a reasonable estimate, we recognized a provisional income tax expense amount of $3.0 million which is included as a component of income tax expense.

We remeasured U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. This requires estimates of our changes in deferred tax assets and liabilities before and after the new statutory rate was enacted.

As a result, we are still analyzing certain aspects of the legislation and refining our calculations such as, refining current year estimates and filings of tax returns, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. As of September 30, 2018, the provisional amount recorded related to the re-measurement of this deferred tax balance was $2.7 million. This is a result a federal income tax rate of 35% for fiscal 2017, 24.25% for fiscal 2018

11. INCOME TAXES (CONTINUED)

and 21% for fiscal 2019 and beyond. Timing differences as of September 30, 2018 are estimated balances and thus will result in a change to our estimate of the deferred rate change. This estimate will be finalized with the filing of our fiscal 2018 income tax return. Since many of the deferred tax balances in the period include estimates of events that have not yet occurred, we are unable to determine the final impact of the tax change at this time.

In addition, we considered the potential tax expense impacts of the one-time transition tax. The transition tax is based on our total post-1986 earnings and profits (“E&P”) previously deferred from U.S. income taxes. A provisional amount for our one-time transition tax liability was recorded for foreign subsidiaries, including estimated state tax impacts. This resulted in an increase in income tax expense of $0.3 million for the twelve months ended September 30, 2018. We have not yet completed the calculation of E&P for foreign subsidiaries. Further, this transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when we finalize the calculation of E&P previously deferred from U.S. federal taxation, evaluate the testing periods for cash and E&P measurement and finalize substantiation of material foreign taxes paid or accrued. Furthermore, it is expected that additional guidance will be forthcoming from U.S. Treasury which may or may not impact the final transition tax required. We will complete our accounting for the Act during the first quarter of fiscal 2019. We do not expect any material adjustments.

We adopted ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting” on October 1, 2017. As a result of the adoption, we recorded $0.6 million of excess tax expense related to our share-based payments in our provision for income taxes for the twelve months ended September 30, 2018. Historically, this was recorded in additional paid-in capital. The excess tax expense related to share-based payments are recognized as tax expense discretely related to the twelve months ended September 30, 2018.

During fiscal 2017, net tax benefits discrete to the period were $1.0 million, primarily from the reversal of tax reserves due to the expiration of statutes of limitation from U.S. and foreign tax jurisdictions. These benefits are included within the discrete tax benefits in the above table.

During fiscal 2016, net tax benefits discrete to the period were $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 items in the above table.

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



	Fiscal years ended September 30,
	2018			2017			2016
Unrecognized tax benefits at beginning of fiscal year	$	1,335		$	1,708		$	1,618
Increases related to:
Prior year income tax positions	39			21			107
Current year income tax positions	315			257			240
Decreases related to:
Prior year income tax positions	—			—			(71		)
Settlements	—			—			(30		)
Expiration of statute of limitations	(128		)	(651		)	(156		)
Unrecognized tax benefits at end of fiscal year	$	1,561		$	1,335		$	1,708

The total amount of unrecognized tax benefits ("UTB") at September 30, 2018 that, if recognized, would affect our effective tax rate is $1.4 million. We expect that it is reasonably possible that the total amounts of UTB that will decrease over the next 12 months due to the expiration of various statutes of limitations will be immaterial. Of the $1.6 million of UTB, $0.8 million is included in non-current income taxes payable and $0.8 million is included with non-current deferred tax assets on the consolidated balance sheet at September 30, 2018.

We recognize interest and penalties related to income tax matters in income tax expense. During fiscal 2018 and 2017, there were insignificant amounts of interest and penalties related to income tax matters in income tax expense. We had accrued

11. INCOME TAXES (CONTINUED)

interest and penalties related to unrecognized tax benefits of $0.1 million at both September 30, 2018 and 2017. These accrued interest and penalties are included in our non-current income taxes payable on our consolidated balance sheets.

We file a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. With few exceptions, we are no longer subject to state and local or non-U.S. income tax examinations by tax authorities for years before fiscal year 2014.

We continue to review the outside basis differential of our foreign investments given recent US tax reform as discussed above. 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 been recorded. As a majority of foreign earnings have been subject to tax under the one time transition tax ("IRC Sec. 965"), a portion of already taxed cash balances were remitted to the US during the year which gave rise to nominal additional tax effects. Furthermore, we have considered any additional taxes which may result from future distributions of cash which have also been subject to US tax under IRC Sec. 965, such as local withholding taxes, US tax on currency as well as potential US State income taxes, which additional nominal deferred tax effects were included in the current year tax computations. Other than these potential distributions, no additional income taxes have been provided for any undistributed foreign earnings not subject to the transition tax and additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations.

At September 30, 2018, we had approximately $4.0 million of un-taxed accumulated undistributed foreign earnings that was not subject to IRC Sec. 965, for which we have not accrued additional U.S. tax. Although we have no current need to repatriate historical foreign earnings that have not been taxed in 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 immaterial.

Stock-Based Compensation

12 Months Ended

Sep. 30, 2018

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

STOCK-BASED COMPENSATION

Stock-based awards were granted under the 2018 Omnibus Incentive Plan (the "2018 Plan") beginning January 29, 2018 and, prior to that, were granted under the 2017 Omnibus Incentive Plan (the "2017 Plan"). Upon stockholder approval of the 2018 Plan, we ceased granting awards under any prior plan. Shares subject to awards under prior plans that are forfeited, canceled, returned to the Company for failure to satisfy vesting requirements, settled in cash or otherwise terminated without payment also will be available for grant under the 2018 Plan. The authority to grant options under the 2018 Plan and to set other terms and conditions rests with the Compensation Committee of the Board of Directors. We also have awards outstanding under our 2016 Omnibus Plan (the "2016 Plan"), 2014 Omnibus Plan (the "2014 Plan"), 2013 Omnibus Incentive Plan (the "2013 Plan") and the 2000 Omnibus Stock Plan, as amended and restated as of December 4, 2009 (the "2000 Plan").

The 2018 Plan authorizes the issuance of up to 1,500,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based full value awards or other stock-based awards. Eligible participants include our employees, our affiliates, non-employee directors of our Company and any consultant or advisor who is a natural person and provides services to us or our affiliates. Options that have been granted under the 2018 Plan typically vest over a four-year period and will expire if unexercised after seven years from the date of grant. Restricted stock unit awards (“RSUs”) that have been granted to directors typically vest in one year. RSUs that have been granted to executives and employees typically vest in January over a four-year period. Awards may be granted under the 2018 Plan until January 28, 2028. Options under the 2018 Plan can be granted as either incentive stock options (“ISOs”) or non-statutory stock options (“NSOs”). The exercise price of options and the grant date price of restricted stock units shall be determined by our Compensation Committee but shall not be less than the fair market value of our common stock based on the closing price on the date of grant. As of September 30, 2018, there were approximately 1,313,651 shares available for future grants under the 2018 Plan.

The 2017 Plan, under which grants ceased upon approval of the 2018 Plan, authorized the issuance of up to 1,500,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based full value awards or other stock-based awards. Eligible participants included our employees, our affiliates, non-employee directors of our Company and any consultant or advisor who is a natural person and provided services to us or our affiliates. Options that have been granted under the 2017 Plan typically vested over a four-year period and expired if unexercised after seven years from the date of grant. RSUs that were granted to directors typically vested in one year. RSUs that were granted to executives and employees typically vested in January over a four-year period. Options under the 2017 Plan

12. STOCK-BASED COMPENSATION (CONTINUED)

could be granted as ISOs or NSOs. The exercise price of options and the grant date price of restricted stock units 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 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 included our employees, our affiliates, non-employee directors of our Company and any consultant or advisor who is a natural person and provided services to us or our affiliates. Options that were granted under the 2016 Plan typically vested over a four-year period and expired if unexercised after seven years from the date of grant. RSUs that were granted to directors typically vested in one year. RSUs that were granted to executives and employees typically vested in November or January over a four-year period. Options under the 2016 Plan could be granted as either ISOs or NSOs. The exercise price of options and the grant date price of restricted stock was determined by our Compensation Committee but were not less than the fair market value of our common stock based on the closing price on the date of grant.

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

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

The 2000 Plan initially authorized the issuance of up to 5,750,000 common shares in connection with awards of stock options, stock appreciation rights, restricted stock, performance units or stock awards. Eligible participants included our employees, non-employee directors, consultants and advisors. An authorization to issue an additional 2,500,000 common shares was ratified on January 25, 2010 at the Annual Meeting of Stockholders. Awards may no longer be granted under the 2000 Plan as the plan was terminated as to future awards on January 28, 2013 at the Annual Meeting of Stockholders. Options under the 2000 Plan were granted as either ISOs or non-statutory stock options NSOs. The exercise price was determined by our Compensation Committee but could not be less than the fair market value of our common stock based on the closing price on the date of grant.

Our equity plans and corresponding forms of award agreements generally have provisions allowing employees to elect to satisfy tax withholding obligations through the delivery of shares, having us retain a portion of shares issuable under the award or paying cash to us for the withholding. During fiscal 2018, 2017 and 2016 our employees forfeited 74,204, 49,684 and 47,464 shares, respectively in order to satisfy $0.7 million, $0.7 million and $0.6 million, respectively, of withholding tax obligations related to stock-based compensation, pursuant to terms of awards under our board and shareholder-approved compensation plans.

We recorded cash received from the exercise of stock options of $5.5 million, $3.5 million and $7.2 million during fiscal years 2018, 2017 and 2016, respectively.

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

12. STOCK-BASED COMPENSATION (CONTINUED)

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 $1.1 million, $0.7 million and $0.9 million in fiscal 2018, 2017 and 2016. Pursuant to the Purchase Plan, 125,446, 72,594, and 103,915 shares of common stock were issued to employees during fiscal 2018, 2017 and 2016, respectively. Shares are issued under the Purchase Plan from treasury stock. As of September 30, 2018, 315,576 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, 2018, 2017 and 2016.

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



	Fiscal years ended September 30,
	2018			2017			2016
Cost of sales	$	195		$	213		$	215
Sales and marketing	1,492			1,348			921
Research and development	516			656			590
General and administrative	2,651			2,442			1,923
Stock-based compensation before income taxes	4,854			4,659			3,649
Income tax benefit	(1,017		)	(1,536		)	(1,185		)
Stock-based compensation after income taxes	$	3,837		$	3,123		$	2,464

Stock Options

A summary of our stock options as of September 30, 2018 and changes during the twelve months then ended is presented below (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, 2017	3,902		$10.54
Granted	863		10.92
Exercised	(597	)	9.14
Forfeited / Canceled	(642	)	12.64
Balance at September 30, 2018	3,526		$10.49	4.2	$	10,470

Exercisable at September 30, 2018	2,245		$10.09	3.3	$	7,558

(1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $13.45 as of September 30, 2018, 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, 2018, 2017 and 2016 was $1.2 million, $0.9 million and $1.9 million, respectively.

12. STOCK-BASED COMPENSATION (CONTINUED)

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,
	2018		2017		2016
Weighted average per option grant date fair value	$	3.98	$	4.63	$	3.90
Assumptions used for option grants:
Risk free interest rate	2.12% - 2.89%		1.46% - 1.96%		1.22% - 1.85%
Expected term	6.00 years		6.00 years		6.00 years
Expected volatility	33% - 34%		33% - 34%		32% - 33%
Weighted average volatility	33%		34%		32%
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.

As of September 30, 2018, the total unrecognized compensation cost related to non-vested stock-based compensation arrangements, net of expected forfeitures, was $4.4 million and the related weighted average period over which it is expected to be recognized was approximately 2.8 years.

As of September 30, 2018, 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 - $8.30	694	3.16	$	8.00	604	$	7.97
$8.31 - $9.68	551	3.27	$	9.39	515	$	9.42
$9.69 - $10.33	644	5.38	$	10.14	129	$	9.89
$10.34 - $10.81	554	3.79	$	10.63	421	$	10.72
$10.82 - $12.63	523	4.36	$	12.00	379	$	11.99
$12.64 - $13.50	548	5.55	$	13.50	185	$	13.50
$13.51 - $14.75	12	2.82	$	14.75	12	$	14.75
$7.40 - $14.75	3,526	4.23	$	10.49	2,245	$	10.09

The total grant date fair value of shares vested was $3.3 million, $2.4 million and $2.9 million in each of fiscal 2018, 2017 and 2016, respectively.

12. STOCK-BASED COMPENSATION (CONTINUED)

Non-vested Restricted Stock Units

A summary of our non-vested restricted stock units as of September 30, 2018 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, 2017	566		$	11.28
Granted	415		$	10.77
Vested	(207	)	$	11.02
Canceled	(100	)	$	11.21
Nonvested at September 30, 2018	674		$	11.05

As of September 30, 2018, the total unrecognized compensation cost related to non-vested restricted stock units was $5.3 million and the related weighted average period over which it is expected to be recognized was approximately 1.3 years.

Common Stock Repurchase	12 Months Ended
Common Stock Repurchase	Sep. 30, 2018
Common Stock Repurchase [Abstract]
COMMON STOCK REPURCHASE	COMMON STOCK REPURCHASE Common Stock Repurchase Program On April 24, 2018 our Board of Directors authorized a new program to repurchase up to $20.0 million of our common stock primarily to return capital to shareholders. This repurchase authorization began on May 23, 2018 and expires on November 23, 2018. Shares repurchased under the new 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 depends upon market conditions and other corporate considerations. There were no shares repurchased under this program. On May 2, 2017, our Board of Directors authorized a program to repurchase up to $20.0 million of our common stock primarily to return capital to shareholders. This repurchase authorization expired on May 1, 2018. Shares repurchased under the program could be made through open market and privately negotiated transactions from time to time and in amounts that management deemed appropriate. The amount and timing of share repurchases depended upon market conditions and other corporate considerations. During the third quarter of fiscal 2017, we began to repurchase our common stock on the open market. During the third quarter of fiscal 2017, we repurchased 28,691 shares for $0.3 million. No further repurchases of common stock were made 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 expired on May 1, 2017. There were no shares repurchased under this program.

Commitments

12 Months Ended

Sep. 30, 2018

Leases, Operating [Abstract]

COMMITMENTS

We have entered into various operating lease agreements for office facilities and equipment, the last of which expires in fiscal 2026. 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 at September 30, 2018 under noncancelable operating leases (in thousands):



Fiscal year	Amount
2019	$	1,986
2020	1,675
2021	1,235
2022	1,054
2023	833
Thereafter	1,836
Total minimum payments required	$	8,619

Subsequent to the end of the fiscal 2018, in October 2018, we signed a thirteen-year lease agreement with minimum lease obligations of $15.9 million with Colfin Midwest NNN Investor, LLC (see Note 18 to our Consolidated Financial Statements).

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,
	2018		2017		2016
Rentals	$	1,735	$	1,342	$	1,613
Less: sublease rentals	—		—		(46		)
Total rental expense	$	1,735	$	1,342	$	1,567

Quarterly Financial Data

12 Months Ended

Sep. 30, 2018

Quarterly Financial Information Disclosure [Abstract]

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 2018
Revenue	$	45,197		$	54,791		$	62,716	$	65,662
Gross profit	$	21,937		$	26,654		$	29,329	$	30,963
Net (loss) income (1)(2)	$	(4,569	)	$	(357	)	$	2,621	$	3,608
Net (loss) income per common share - basic	$	(0.17	)	$	(0.01	)	$	0.10	$	0.13
Net (loss) income per common share - diluted	$	(0.17	)	$	(0.01	)	$	0.09	$	0.13

Fiscal 2017
Revenue	$	45,175		$	45,615		$	45,739	$	45,105
Gross profit	$	21,453		$	21,902		$	22,485	$	21,334
Net income (1)(2)	$	2,357		$	1,331		$	1,335	$	4,343
Net income per common share - basic	$	0.09		$	0.05		$	0.05	$	0.16
Net income per common share - diluted	$	0.09		$	0.05		$	0.05	$	0.16

(1)

During fiscal 2018, we recorded net tax expenses of $1.5 million and in fiscal 2017, we recorded net tax benefits of $1.0 million, respectively. We recorded tax expense of $2.8 million in the first quarter of fiscal 2018, $0.2 million in the second quarter of fiscal 2018 and $0.1 million in the third quarter of fiscal 2018 resulting from new U.S. tax legislation that was enacted during the first quarter of fiscal 2018 and the adoption of ASU 2016-09 relating to the accounting for the tax effects of stock compensation. In the fourth quarter of fiscal 2018, we recorded a net tax benefit of $1.5 million for the release of a valuation allowance against U.S. federal capital loss carryforward due to expected capital gains tax in fiscal 2019 resulting from the sale of our corporate headquarters building in October 2018 (see Note 18 to the Consolidated Financial Statements) along with U.S., state and foreign prior year true-up provision to return.

We recorded a benefit of $0.1 million in the first quarter of fiscal 2017 resulting from reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the third quarter of fiscal 2017, we recorded a tax benefit of $0.7 million from reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the fourth quarter of fiscal 2017, we recorded a net tax benefit of $0.2 million, primarily from the reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions and state and foreign prior year true-up provision to return.


(2)	For continuing operations, we recorded business restructuring charges of $0.2 million ($0.1 million after tax) in the third quarter of fiscal 2018 and $0.1 million ($0.1 million after tax) in the fourth quarter of fiscal 2018. We also recorded business restructuring charges of $2.5 million ($1.6 million after tax) in the third quarter of fiscal 2017.

Subsequent Event	12 Months Ended
Subsequent Event	Sep. 30, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENT	SUBSEQUENT EVENT Corporate Headquarters Move Subsequent to the end of fiscal 2018, on October 2, 2018, we sold our 130,000 square feet corporate headquarters building in Minnetonka, Minnesota to Minnetonka Leased Housing Associates II, LLLP. The sales price was $10.0 million in cash adjusted for certain selling costs and an escrow for the leaseback of the building for four months. At September 30, 2018 the net book value of the land, building and improvements was $5.2 million and listed as Assets held for sale on our Consolidated Balance Sheet. As a result, we recorded a $1.1 million tax benefit in the fourth quarter of fiscal 2018 because we are able to use credit loss carryforwards which previously had a valuation allowance. We expect to record a gain of approximately $4.5 million ($3.4 million net of deferred tax effects) in the first quarter of fiscal 2019. In October 2018, we signed a thirteen-year lease agreement with minimum lease obligations of $15.9 million with Colfin Midwest NNN Investor, LLC for 59,497 square feet of office space. This will be our new headquarters location in Hopkins, Minnesota, which is approximately three miles from our current headquarters.

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Sep. 30, 2018

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Schedule II- Valuation and Qualifying Accounts

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

DIGI INTERNATIONAL INC.

(in thousands)



			Additions
Description	Balance at beginning of period		Charged to costs and expenses		Charged to Other Accounts			Deductions			Balance at end of period
Valuation allowance - deferred tax assets
September 30, 2018	$	5,952	$	521	$	—		$	3,182		$	3,291
September 30, 2017	$	5,914	$	136	$	—		$	98		$	5,952
September 30, 2016	$	862	$	5,260	$	—		$	208		$	5,914

Valuation account - doubtful accounts
September 30, 2018	$	341	$	729	$	40	(1)	$	37	(3)	$	1,073
September 30, 2017	$	209	$	127	$	20	(2)	$	15	(3)	$	341
September 30, 2016	$	285	$	10	$	—		$	86	(3)	$	209

Reserve for future returns and pricing adjustments
September 30, 2018	$	2,169	$	10,715	$	—		$	10,324		$	2,560
September 30, 2017	$	1,991	$	10,447	$	—		$	10,269		$	2,169
September 30, 2016	$	1,817	$	9,946	$	—		$	9,772		$	1,991


(1)	Established through purchase accounting relating to the acquisition of TempAlert


(2)	Established through purchase accounting relating to the acquisition of SMART Temps^®


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

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2018

Principles of Consolidation

Discontinued Operations

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

Reclassifications

Cash Equivalents

Marketable Securities

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accounts Receivable

Inventories

Property, Equipment and Improvements, Net

Identifiable Intangible Assets

Goodwill

Implied fair values, for both reporting units were each calculated on a standalone basis using a weighted combination of the income approach and market approach.

Contingent Consideration

Warranties

Treasury stock

Treasury Stock

We record treasury stock at cost. Treasury stock includes shares purchased from employees for tax withholding purposes related to vesting of restricted stock awards.

Revenue Recognition

We recognize revenue in accordance with authoritative guidance issued by Financial Accounting Standards Board ("FASB") related to revenue recognition.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Research and Development

Income Taxes

Stock-Based Compensation

Foreign Currency Translation

Use of Estimates and Risks and Uncertainties

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Comprehensive Income (Loss)

Comprehensive Income

Net Income Per Common Share

Recent Accounting Developments

Adopted

Below is a summary of the impact upon adoption of ASU 2016-09:

•


•	We adjusted our dilutive shares to remove the excess tax benefits from the calculation of EPS on a prospective basis beginning October 2, 2017. The revised calculation is more dilutive, but did not have a material impact on the Company’s diluted EPS calculation for the three months ended December 31, 2017.


•	Further, we had no tax benefits that were not previously recognized because the related tax deduction had not reduced taxes payable, therefore, there was no cumulative-effect adjustment to our beginning retained earnings on October 1, 2017.


•	Additionally, we prospectively adopted the provision to classify excess tax benefits and deficiencies within cash flows from operating activities as part of cash payments for taxes on the statement of cash flows. Prior periods on the statement of cash flows have not been adjusted.


•	Upon adoption of ASU 2016-09, we account for forfeitures as they occur, rather than estimating forfeitures as of an awards grant date. This change in accounting policy election was adopted using a modified retrospective transition method and on October 1, 2017, we recognized a cumulative effect unfavorable adjustment to retained earnings of approximately $33,000.


•	We have previously shown separately, tax payments made on behalf of an employee by repurchasing shares of stock as cash outflows from financing activities on the statement of cash flows. This provision was retrospectively adopted, and prior period cash flows already conformed with this presentation.

Not Yet Adopted

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The adoption of the standard related to the new revenue recognition is expected to impact our reported results as follows:



	Fiscal year ended September 30, 2018
(in thousands, except per common share data)	As Reported		Impact of Adoption			As Adjusted
Revenue:
Hardware product	$	191,050	$	—		$	191,050
Services and solutions	37,316		(1,473		)	35,843
Total revenue	228,366		(1,473		)	226,893
Cost of sales:
Cost of hardware product	96,332		—			96,332
Cost of services and solutions	20,280		(1,644		)	18,636
Amortization	2,871		—			2,871
Total cost of sales	119,483		(1,644		)	117,839
Gross profit	108,883		171			109,054
Operating expenses	106,561		(289		)	106,272
Operating income	2,322		460			2,782
Net income	$	1,303	$	328		$	1,631
Diluted earnings per share	$	0.05	$	0.01		$	0.06



	Fiscal year ended September 30, 2017
(in thousands, except per common share data)	As Reported		Impact of Adoption			As Adjusted
Revenue:
Hardware product	$	166,480	—			$	166,480
Services and solutions	15,154		(294		)	14,860
Total revenue	181,634		(294		)	181,340
Cost of sales:
Cost of hardware product	85,369		—			85,369
Cost of services and solutions	7,647		(353		)	7,294
Amortization	1,444		—			1,444
Total cost of sales	94,460		(353		)	94,107
Gross profit	87,174		59			87,233
Operating expenses	78,367		—			78,367
Operating income	8,807		59			8,866
Net income	$	9,366	37			$	9,403
Diluted earnings per share	$	0.35	$	—		$	0.35

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



	September 30, 2018
(in thousands)	As Reported		Impact of Adoption			As Adjusted
Accounts receivable, net	$	50,817	$	(998	)	$	49,819
Other current assets	$	2,613	$	885		$	3,498
Deferred tax assets	$	6,665	$	(65	)	$	6,600
Other non-current assets	$	1,291	$	1,199		$	2,490
Other current liabilities	$	2,413	$	598		$	3,011
Other non-current liabilities	$	510	$	210		$	720
Stockholders' equity	$	330,280	$	213		$	330,493



	September 30, 2017
(in thousands)	As Reported		Impact of Adoption			As Adjusted
Other current assets	$	3,032	$	172		$	3,204
Deferred tax assets	$	9,211	$	67		$	9,278
Other non-current assets	$	269	$	268		$	537
Other current liabilities	$	2,113	$	469		$	2,582
Other non-current liabilities	$	654	$	153		$	807
Stockholders' equity	$	319,144	$	(115	)	$	319,029

Adoption of the standards related to revenue recognition had no impact to cash from our used in operating, financing or investing on our consolidated statements of cash flows.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2018

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,
	2018		2017		2016
Numerator:
Income from continuing operations	$	1,303	$	9,366	$	13,478
Income from discontinued operations, after income taxes	$	—	$	—	$	3,230
Net income	$	1,303	$	9,366	$	16,708
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	27,083		26,432		25,760
Effect of dilutive securities:
Stock options and restricted stock units	569		667		551
Denominator for diluted net income per common share — adjusted weighted average shares	27,652		27,099		26,311

Basic net income per common share:
Continuing operations	$	0.05	$	0.35	$	0.52
Discontinued operations	$	—	$	—	$	0.13
Net income	$	0.05	$	0.35	$	0.65
Diluted net income per common share:
Continuing operations	$	0.05	$	0.35	$	0.51
Discontinued operations	$	—	$	—	$	0.12
Net income (1)	$	0.05	$	0.35	$	0.64

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

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

The adoption of the standard related to the new revenue recognition is expected to impact our reported results as follows:



	Fiscal year ended September 30, 2018
(in thousands, except per common share data)	As Reported		Impact of Adoption			As Adjusted
Revenue:
Hardware product	$	191,050	$	—		$	191,050
Services and solutions	37,316		(1,473		)	35,843
Total revenue	228,366		(1,473		)	226,893
Cost of sales:
Cost of hardware product	96,332		—			96,332
Cost of services and solutions	20,280		(1,644		)	18,636
Amortization	2,871		—			2,871
Total cost of sales	119,483		(1,644		)	117,839
Gross profit	108,883		171			109,054
Operating expenses	106,561		(289		)	106,272
Operating income	2,322		460			2,782
Net income	$	1,303	$	328		$	1,631
Diluted earnings per share	$	0.05	$	0.01		$	0.06



	Fiscal year ended September 30, 2017
(in thousands, except per common share data)	As Reported		Impact of Adoption			As Adjusted
Revenue:
Hardware product	$	166,480	—			$	166,480
Services and solutions	15,154		(294		)	14,860
Total revenue	181,634		(294		)	181,340
Cost of sales:
Cost of hardware product	85,369		—			85,369
Cost of services and solutions	7,647		(353		)	7,294
Amortization	1,444		—			1,444
Total cost of sales	94,460		(353		)	94,107
Gross profit	87,174		59			87,233
Operating expenses	78,367		—			78,367
Operating income	8,807		59			8,866
Net income	$	9,366	37			$	9,403
Diluted earnings per share	$	0.35	$	—		$	0.35

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



	September 30, 2018
(in thousands)	As Reported		Impact of Adoption			As Adjusted
Accounts receivable, net	$	50,817	$	(998	)	$	49,819
Other current assets	$	2,613	$	885		$	3,498
Deferred tax assets	$	6,665	$	(65	)	$	6,600
Other non-current assets	$	1,291	$	1,199		$	2,490
Other current liabilities	$	2,413	$	598		$	3,011
Other non-current liabilities	$	510	$	210		$	720
Stockholders' equity	$	330,280	$	213		$	330,493



	September 30, 2017
(in thousands)	As Reported		Impact of Adoption			As Adjusted
Other current assets	$	3,032	$	172		$	3,204
Deferred tax assets	$	9,211	$	67		$	9,278
Other non-current assets	$	269	$	268		$	537
Other current liabilities	$	2,113	$	469		$	2,582
Other non-current liabilities	$	654	$	153		$	807
Stockholders' equity	$	319,144	$	(115	)	$	319,029

Acquisition (Tables)

12 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

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

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



Cash	$	16,430
Fair value of contingent consideration on acquired business	2,300
Total purchase price consideration	$	18,730

Fair value of net tangible assets acquired	$	766
Fair value of identifiable intangible assets acquired:
Customer relationships	6,500
Purchased and core technology	3,000
Trade name and trademarks	1,000
Order backlog	1,800
Goodwill	5,664
Total	$	18,730

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



Cash	$	40,741
Fair value of contingent consideration on acquired business	—
Total purchase price consideration	$	40,741

Fair value of net tangible assets acquired	$	(1,111	)
Fair value of identifiable intangible assets acquired:
Customer relationships	18,300
Purchased and core technology	4,000
Trade name and trademarks	2,000
Goodwill	17,552
Total	$	40,741

Business Acquisition, Pro Forma Information

The following consolidated pro forma information is as if the Accelerated and TempAlert acquisitions had occurred on October 1, 2016 (in thousands):



	Fiscal years ended September 30,
	2018		2017
Revenue	$	233,789	$	213,505
Net income	$	1,314	$	4,117

Discontinued Operations (Tables)

12 Months Ended

Sep. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations

The following table presents amortization of the discontinued operations related to Etherios (in thousands):



	Fiscal year ended September 30,
	2016
Amortization of identifiable intangible assets	$	30

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



	Fiscal year ended September 30,
	2016
Service revenue	$	891
Cost of service	713
Gross profit	178
Operating expenses:
Sales and marketing	148
Research and development	103
General and administrative	43
Total operating expenses	294
Loss from discontinued operations, before income taxes	(116		)
Gain on sale of discontinued operations, before income taxes	2,870
Income from discontinued operations, before income taxes	2,754
Income tax benefit on discontinued operations	(476		)
Income from discontinued operations, after income taxes	$	3,230

Goodwill and Intangible Assets Disclosure [Abstract]

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.

+ References

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+ Details

Goodwill and other Identifiable Intangible Assets (Tables)

12 Months Ended

Sep. 30, 2018

Schedule of Amortizable Identifiable Intangible Assets

Amortizable identifiable intangible assets, net as of September 30, 2018 and 2017 were comprised of the following (in thousands):



	September 30, 2018							September 30, 2017
	Gross carrying amount		Accum. amort.			Net		Gross carrying amount		Accum. amort.			Net
Purchased and core technology	$	58,102	$	(48,693	)	$	9,409	$	51,292	$	(46,304	)	$	4,988
License agreements	102		(46		)	56		18		(17		)	1
Patents and trademarks	15,701		(12,242		)	3,459		12,484		(11,280		)	1,204
Customer relationships	46,605		(21,049		)	25,556		21,914		(16,817		)	5,097
Non-compete agreements	600		(210		)	390		600		(90		)	510
Order backlog	1,800		(1,350		)	450		—		—			—
Total	$	122,910	$	(83,590	)	$	39,320	$	86,308	$	(74,508	)	$	11,800

Schedule of Amortization Expense

Amortization expense for fiscal years 2018, 2017 and 2016 was as follows (in thousands):



Fiscal year	Total
2018	$	9,435
2017	$	2,597
2016	$	1,842

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
2019	$	8,888
2020	$	8,118
2021	$	7,422
2022	$	6,554
2023	$	4,362

Schedule of Changes in Carrying Amount of Goodwill

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



	Fiscal years ended September 30,
	2018			2017
Beginning balance, October 1	$	131,995		$	109,448
Acquisitions	23,216			21,465
Foreign currency translation adjustment	(676		)	1,082
Ending balance, September 30	$	154,535		$	131,995

Segment Information and Major Customers (Tables)

12 Months Ended

Sep. 30, 2018

Revenues from External Customers and Long-Lived Assets [Line Items]

Schedule of Segment Reporting Information, by Segment

Summary operating results for each of our segments were as follows (in thousands):



	Fiscal years ended September 30,
	2018			2017			2016
Revenue
IoT Products & Services	$	201,506		$	174,237		$	202,294
IoT Solutions	26,860			7,397			711
Total revenue	$	228,366		$	181,634		$	203,005
Operating income (loss)
IoT Products & Services	$	14,923		$	12,804		$	18,822
IoT Solutions	(12,601		)	(3,997		)	(1,717		)
Total operating income	$	2,322		$	8,807		$	17,105
Depreciation and amortization
IoT Products & Services	$	6,040		$	3,575		$	4,040
IoT Solutions	6,230			1,922			544
Total depreciation and amortization	$	12,270		$	5,497		$	4,584

Payments to Acquire Property, Plant and Equipment by Segment

Total expended for property, plant and equipment was as follows (in thousands):



	Fiscal years ended September 30,
	2018		2017		2016
IoT Products & Services	$	1,773	$	1,738	$	2,641
IoT Solutions	69		35		88
Total expended for property, plant and equipment	$	1,842	$	1,773	$	2,729

Schedule of Total Assets by Segment

Total assets for each of our segments were as follows (in thousands):



	As of September 30,
	2018		2017
IoT Products & Services	$	209,574	$	182,555
IoT Solutions	98,801		47,644
Unallocated*	62,750		114,990
Total assets	$	371,125	$	345,189

*Unallocated consists of cash and cash equivalents, current marketable securities and long-term marketable securities.

Schedule of Goodwill by Segment

Total goodwill for each of our segments were as follows (in thousands):



	As of September 30,
	2018		2017
IoT Products & Services	$	104,358	$	98,981
IoT Solutions	50,177		33,014
Total goodwill	$	154,535	$	131,995

Schedule of Net Property, Equipment and Improvements by Geographical Location

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



	As of September 30,
	2018		2017
United States	$	6,156	$	12,648
International, primarily Europe	114		153
Total net property, equipment and improvements	$	6,270	$	12,801

Schedule of Revenue by Geographic Location

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



	Fiscal years ended September 30,
	2018		2017		2016
North America, primarily United States	$	163,397	$	117,749	$	131,457
Europe, Middle East & Africa	39,211		39,403		44,932
Asia	20,881		19,892		20,390
Latin America	4,877		4,590		6,226
Total revenue	$	228,366	$	181,634	$	203,005

Marketable Securities (Tables)

12 Months Ended

Sep. 30, 2018

Marketable Securities [Abstract]

Schedule of Marketable Securities

At September 30, 2018 our marketable securities consisted of (in thousands):



	Amortized Cost (1)		Unrealized Gains		Unrealized Losses			Fair Value (1)
Current marketable securities:
Certificates of deposit	$	4,756	$	—	$	(20	)	$	4,736
Total marketable securities	$	4,756	$	—	$	(20	)	$	4,736


(1)	Included in amortized cost and fair value is purchased and accrued interest of $6.

At September 30, 2017 our marketable securities consisted of (in thousands):



	Amortized Cost (1)		Unrealized Gains		Unrealized Losses			Fair Value (1)
Current marketable securities:
Corporate bonds	$	28,275	$	—	$	(20	)	$	28,255
Certificates of deposit	3,756		4		—			3,760
Current marketable securities	32,031		4		(20		)	32,015
Non-current marketable securities:
Certificates of deposit	4,757		—		(4		)	4,753
Total marketable securities	$	36,788	$	4	$	(24	)	$	36,768


(1)	Included in amortized cost and fair value is purchased and accrued interest of $211.

Schedule of Unrealized Losses on Available-for-Sale Securities



	September 30, 2018
	Less than 12 Months				More than 12 Months
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Certificates of deposit	$	—	$	—	$	4,736	$	(20	)
Total	$	—	$	—	$	4,736	$	(20	)

7. MARKETABLE SECURITIES (CONTINUED)



	September 30, 2017
	Less than 12 Months					More than 12 Months
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate bonds	$	26,196	$	(20	)	$	—	$	—
Certificates of deposit	3,751		(4		)	—		—
Total	$	29,947	$	(24	)	$	—	$	—

Fair Value Measurements (Tables)

12 Months Ended

Sep. 30, 2018

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, 2018 using:
	Total carrying value at September 30, 2018		Quoted price in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Money market	$	24,318	$	24,318	$	—	$	—
Certificates of deposit	4,736		—		4,736		—
Total assets measured at fair value	$	29,054	$	24,318	$	4,736	$	—
Liabilities:
Contingent consideration on acquired business	$	10,065	$	—	$	—	$	10,065
Total liabilities measured at fair value	$	10,065	$	—	$	—	$	10,065

8. FAIR VALUE MEASUREMENTS (CONTINUED)



			Fair Value Measurements at September 30, 2017 using:
	Total carrying value at September 30, 2017		Quoted price in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Money market	$	39,524	$	39,524	$	—	$	—
Corporate bonds	28,255		—		28,255		—
Certificates of deposit	8,513		—		8,513		—
Total assets measured at fair value	$	76,292	$	39,524	$	36,768	$	—
Liabilities:
Contingent consideration on acquired business	$	6,388	$	—	$	—	$	6,388
Total liabilities measured at fair value	$	6,388	$	—	$	—	$	6,388

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

The following table presents a reconciliation of the contingent consideration liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):



	Fiscal years ended September 30,
	2018		2017
Fair value at beginning of period	$	6,388	$	9,960
Purchase price contingent consideration	2,300		1,310
Contingent consideration payments	—		(518		)
Change in fair value of contingent consideration	1,377		(4,364		)
Fair value at end of period	$	10,065	$	6,388

Restructuring (Tables)

12 Months Ended

Sep. 30, 2018

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve

Below is a summary of the restructuring charges and other activity within the restructuring accrual all of which is included in our IoT Products & Services segment (in thousands):



	Manufacturing Transition			2017 Restructuring						2016 Restructuring
	Employee Termination Costs			Employee Termination Costs			Other			Employee Termination Costs			Other			Total
Balance at September 30, 2015	$	—		$	—		$	—		$	—		$	—		$	—
Restructuring charge	—			—			—			558			195			753
Payments	—			—			—			(559		)	(195		)	(754		)
Reversals	—			—			—			(6		)	—			(6		)
Foreign currency fluctuation	—			—			—			7			—			7
Balance at September 30, 2016	$	—		$	—		$	—		$	—		$	—		$	—
Restructuring charge	—			2,258			257			—			—			2,515
Payments	—			(845		)	(141		)	—			—			(986		)
Foreign currency fluctuation	—			115			12			—			—			127
Balance at September 30, 2017	$	—		$	1,528		$	128		$	—		$	—		$	1,656
Restructuring charge	504			—			—			—			—			504
Payments	(357		)	(1,035		)	(161		)	—			—			(1,553		)
Reversals	—			(244		)	42			—			—			(202		)
Foreign currency fluctuation	—			44			4			—			—			48
Balance at September 30, 2018	$	147		$	293		$	13		$	—		$	—		$	453

Income Taxes (Tables)

12 Months Ended

Sep. 30, 2018

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,
	2018			2017		2016
United States	$	(2,887	)	$	5,170	$	9,841
International	5,677			4,321		6,849
Income from continuing operations, before income taxes	$	2,790		$	9,491	$	16,690

Schedule of Components of Income Tax Provision

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



	Fiscal years ended September 30,
	2018			2017			2016
Current:
Federal	$	526		$	312		$	(141	)
State	57			165			139
Foreign	1,412			1,756			2,099
Deferred:
U.S.	(668		)	(1,454		)	1,260
Foreign	160			(654		)	(145		)
Income tax provision	$	1,487		$	125		$	3,212

Schedule of Net Deferred Tax Asset

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



	As of September 30,
	2018			2017
Non-current deferred tax asset	$	6,665		$	9,211
Non-current deferred tax liability	(334		)	(534		)
Net deferred tax asset	$	6,331		$	8,677

Uncollectible accounts and other reserves	$	1,000		$	1,063
Depreciation and amortization	(369		)	(673		)
Inventories	740			824
Compensation costs	3,388			5,863
Tax carryforwards	7,063			7,514
Valuation allowance	(3,291		)	(5,952		)
Identifiable intangible assets	(2,298		)	(581		)
Other	98			619
Net deferred tax asset	$	6,331		$	8,677

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,
	2018			2017			2016
Statutory income tax amount	$	1,001		$	2,917		$	5,548
Increase (decrease) resulting from:
State taxes, net of federal benefits	(312		)	(125		)	204
Manufacturing deduction	(364		)	(150		)	(450		)
Meal and entertainment	82			63			55
Transaction costs	79			—			—
Employee stock purchase plan	56			79			83
Foreign operations	(3		)	218			276
Valuation allowance - current year increase	275			159			(43		)
Utilization of tax credits	(1,609		)	(1,168		)	(1,116		)
Discrete items:
Valuation allowance	(1,317		)	—			—
Discrete tax benefits	(765		)	(954		)	(1,461		)
One-time transition tax	250			—			—
Deferred balance sheet remeasure	2,727			—			—
ASU 2016-09 excess stock compensation	643			—			—
Contingent consideration	388			(1,172		)	(154		)
Adjustment of tax contingency reserves	315			257			202
Other, net	41			1			68
Income tax provision	$	1,487		$	125		$	3,212

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,
	2018			2017			2016
Unrecognized tax benefits at beginning of fiscal year	$	1,335		$	1,708		$	1,618
Increases related to:
Prior year income tax positions	39			21			107
Current year income tax positions	315			257			240
Decreases related to:
Prior year income tax positions	—			—			(71		)
Settlements	—			—			(30		)
Expiration of statute of limitations	(128		)	(651		)	(156		)
Unrecognized tax benefits at end of fiscal year	$	1,561		$	1,335		$	1,708

Stock-Based Compensation (Tables)

12 Months Ended

Sep. 30, 2018

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,
	2018			2017			2016
Cost of sales	$	195		$	213		$	215
Sales and marketing	1,492			1,348			921
Research and development	516			656			590
General and administrative	2,651			2,442			1,923
Stock-based compensation before income taxes	4,854			4,659			3,649
Income tax benefit	(1,017		)	(1,536		)	(1,185		)
Stock-based compensation after income taxes	$	3,837		$	3,123		$	2,464

Schedule of Stock Option Activity

A summary of our stock options as of September 30, 2018 and changes during the twelve months then ended is presented below (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, 2017	3,902		$10.54
Granted	863		10.92
Exercised	(597	)	9.14
Forfeited / Canceled	(642	)	12.64
Balance at September 30, 2018	3,526		$10.49	4.2	$	10,470

Exercisable at September 30, 2018	2,245		$10.09	3.3	$	7,558

Schedule of Valuation Assumptions



	Fiscal years ended September 30,
	2018		2017		2016
Weighted average per option grant date fair value	$	3.98	$	4.63	$	3.90
Assumptions used for option grants:
Risk free interest rate	2.12% - 2.89%		1.46% - 1.96%		1.22% - 1.85%
Expected term	6.00 years		6.00 years		6.00 years
Expected volatility	33% - 34%		33% - 34%		32% - 33%
Weighted average volatility	33%		34%		32%
Expected dividend yield	0%		0%		0%

Schedule of Weighted Average Exercise Price Range and Remaining Contractual Life

As of September 30, 2018, 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 - $8.30	694	3.16	$	8.00	604	$	7.97
$8.31 - $9.68	551	3.27	$	9.39	515	$	9.42
$9.69 - $10.33	644	5.38	$	10.14	129	$	9.89
$10.34 - $10.81	554	3.79	$	10.63	421	$	10.72
$10.82 - $12.63	523	4.36	$	12.00	379	$	11.99
$12.64 - $13.50	548	5.55	$	13.50	185	$	13.50
$13.51 - $14.75	12	2.82	$	14.75	12	$	14.75
$7.40 - $14.75	3,526	4.23	$	10.49	2,245	$	10.09

Schedule of Nonvested Restricted Stock Units

A summary of our non-vested restricted stock units as of September 30, 2018 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, 2017	566		$	11.28
Granted	415		$	10.77
Vested	(207	)	$	11.02
Canceled	(100	)	$	11.21
Nonvested at September 30, 2018	674		$	11.05

Commitments (Tables)

12 Months Ended

Sep. 30, 2018

Leases, Operating [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

The following schedule reflects future minimum rental commitments at September 30, 2018 under noncancelable operating leases (in thousands):



Fiscal year	Amount
2019	$	1,986
2020	1,675
2021	1,235
2022	1,054
2023	833
Thereafter	1,836
Total minimum payments required	$	8,619

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,
	2018		2017		2016
Rentals	$	1,735	$	1,342	$	1,613
Less: sublease rentals	—		—		(46		)
Total rental expense	$	1,735	$	1,342	$	1,567

Quarterly Financial Data (Tables)

12 Months Ended

Sep. 30, 2018

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 2018
Revenue	$	45,197		$	54,791		$	62,716	$	65,662
Gross profit	$	21,937		$	26,654		$	29,329	$	30,963
Net (loss) income (1)(2)	$	(4,569	)	$	(357	)	$	2,621	$	3,608
Net (loss) income per common share - basic	$	(0.17	)	$	(0.01	)	$	0.10	$	0.13
Net (loss) income per common share - diluted	$	(0.17	)	$	(0.01	)	$	0.09	$	0.13

Fiscal 2017
Revenue	$	45,175		$	45,615		$	45,739	$	45,105
Gross profit	$	21,453		$	21,902		$	22,485	$	21,334
Net income (1)(2)	$	2,357		$	1,331		$	1,335	$	4,343
Net income per common share - basic	$	0.09		$	0.05		$	0.05	$	0.16
Net income per common share - diluted	$	0.09		$	0.05		$	0.05	$	0.16

(1)


(2)	For continuing operations, we recorded business restructuring charges of $0.2 million ($0.1 million after tax) in the third quarter of fiscal 2018 and $0.1 million ($0.1 million after tax) in the fourth quarter of fiscal 2018. We also recorded business restructuring charges of $2.5 million ($1.6 million after tax) in the third quarter of fiscal 2017.

Summary of Significant Accounting Policies (Property, Equipment and Improvements, Net) (Details)	12 Months Ended
	Sep. 30, 2018
Furniture and Fixtures \| Minimum
Property, Plant and Equipment [Line Items]
Property, equipment and improvements depreciation life	3 years
Furniture and Fixtures \| Maximum
Property, Plant and Equipment [Line Items]
Property, equipment and improvements depreciation life	7 years
Building Improvements
Property, Plant and Equipment [Line Items]
Property, equipment and improvements depreciation life	10 years
Buildings
Property, Plant and Equipment [Line Items]
Property, equipment and improvements depreciation life	39 years

Summary of Significant Accounting Policies (Goodwill) (Details) $ in Thousands	12 Months Ended
	Sep. 30, 2018 USD ($) segment	Jun. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)
Goodwill [Line Items]
Number of reportable segments \| segment	2
Goodwill	$ 154,535		$ 131,995	$ 109,448
Market Capitalization		$ 359,600
IoT Products & Services
Goodwill [Line Items]
Goodwill	104,358	$ 104,600	98,981
Percent fair value in excess of carrying value of goodwill		36.00%
IoT Solutions
Goodwill [Line Items]
Goodwill	$ 50,177	$ 50,000	$ 33,014
Percent fair value in excess of carrying value of goodwill		7.00%
Measurement Input, Control Premium [Member] \| Minimum
Goodwill [Line Items]
Goodwill Valuation Implied Control Premium		5.70%
Measurement Input, Control Premium [Member] \| Maximum
Goodwill [Line Items]
Goodwill Valuation Implied Control Premium		16.40%

Summary of Significant Accounting Policies (Revenue Recognition) (Details)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Hardware products
Concentration Risk [Line Items]
Percentage of revenue	83.70%	91.70%	96.60%
Services and solutions
Concentration Risk [Line Items]
Percentage of revenue	16.30%	8.30%	3.40%

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, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2016

Sep. 30, 2018

Sep. 30, 2017

Sep. 30, 2016

Income from continuing operations

$ 1,303

$ 9,366

$ 13,478

Income from discontinued operations, after income taxes

3,230

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

$ 3,608

^[1],[2]

$ 2,621

^[1],[2]

$ (357)

^[1],[2]

$ (4,569)

^[1],[2]

$ 4,343

^[1],[2]

$ 1,335

^[1],[2]

$ 1,331

^[1],[2]

$ 2,357

^[1],[2]

$ 1,303

$ 9,366

$ 16,708

27,083,000

26,432,000

25,760,000

Effect of dilutive securities:

Stock options and restricted stock units

569,000

667,000

551,000

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

27,652,000

27,099,000

26,311,000

Basic net income per common share:

$ 0.05

$ 0.35

$ 0.52

0.00

0.13

Diluted net income per common share:

$ 0.13

$ 0.10

$ (0.01)

$ (0.17)

$ 0.16

$ 0.05

$ 0.09

0.05

0.35

0.65

0.05

0.35

0.51

Net (loss) income per common share, diluted (USD per share)

0.00

0.12

$ 0.13

$ 0.09

$ (0.01)

$ (0.17)

$ 0.16

$ 0.05

$ 0.09

$ 0.05

$ 0.35

$ 0.64

^[3]

Antidilutive securities excluded from computation of earnings per share

925,063

1,142,322

1,519,691

[1]	During fiscal 2018, we recorded net tax expenses of $1.5 million and in fiscal 2017, we recorded net tax benefits of $1.0 million, respectively. We recorded tax expense of $2.8 million in the first quarter of fiscal 2018, $0.2 million in the second quarter of fiscal 2018 and $0.1 million in the third quarter of fiscal 2018 resulting from new U.S. tax legislation that was enacted during the first quarter of fiscal 2018 and the adoption of ASU 2016-09 relating to the accounting for the tax effects of stock compensation. In the fourth quarter of fiscal 2018, we recorded a net tax benefit of $1.5 million for the release of a valuation allowance against U.S. federal capital loss carryforward due to expected capital gains tax in fiscal 2019 resulting from the sale of our corporate headquarters building in October 2018 (see Note 18 to the Consolidated Financial Statements) along with U.S., state and foreign prior year true-up provision to return.We recorded a benefit of $0.1 million in the first quarter of fiscal 2017 resulting from reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the third quarter of fiscal 2017, we recorded a tax benefit of $0.7 million from reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the fourth quarter of fiscal 2017, we recorded a net tax benefit of $0.2 million, primarily from the reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions and state and foreign prior year true-up provision to return.
[2]	For continuing operations, we recorded business restructuring charges of $0.2 million ($0.1 million after tax) in the third quarter of fiscal 2018 and $0.1 million ($0.1 million after tax) in the fourth quarter of fiscal 2018. We also recorded business restructuring charges of $2.5 million ($1.6 million after tax) in the third quarter of fiscal 2017.
[3]	Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts.

Summary of Significant Accounting Policies (Recent Accounting Developments) (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Oct. 01, 2017	Sep. 30, 2017
Retained Earnings
Cumulative Effect of New Accounting Principle in Period of Adoption		$ 33,000
ASU 2016-09
Tax deficiency from exercise of stock options	$ 600,000
Impact on EPS diluted (USD per share)	$ 0.02
Cumulative Effect of New Accounting Principle in Period of Adoption			$ (19,000)
ASU 2016-09 \| Retained Earnings
Cumulative Effect of New Accounting Principle in Period of Adoption			$ 33,000

Summary of Significant Accounting Policies (Adoption of ASC 606) (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

12 Months Ended

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2016

Sep. 30, 2018

Sep. 30, 2017

Sep. 30, 2016

Sep. 30, 2015

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

$ 65,662

$ 62,716

$ 54,791

$ 45,197

$ 45,105

$ 45,739

$ 45,615

$ 45,175

$ 228,366

$ 181,634

$ 203,005

2,871

1,444

887

119,483

94,460

103,325

30,963

29,329

26,654

21,937

21,334

22,485

21,902

21,453

108,883

87,174

99,680

106,561

78,367

82,575

2,322

8,807

17,105

Net (loss) income per common share, diluted (USD per share)

$ 3,608

^[1],[2]

$ 2,621

^[1],[2]

$ (357)

^[1],[2]

$ (4,569)

^[1],[2]

$ 4,343

^[1],[2]

$ 1,335

^[1],[2]

$ 1,331

^[1],[2]

$ 2,357

^[1],[2]

$ 1,303

$ 9,366

$ 16,708

$ 0.13

$ 0.09

$ (0.01)

$ (0.17)

$ 0.16

$ 0.05

$ 0.09

$ 0.05

$ 0.35

$ 0.64

^[3]

$ 50,817

$ 28,855

$ 50,817

$ 28,855

2,613

3,032

2,613

3,032

6,665

9,211

6,665

9,211

1,291

269

1,291

269

2,413

2,113

2,413

2,113

510

654

510

654

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

330,280

319,144

330,280

319,144

$ 300,029

$ 274,938

Hardware product

191,050

166,480

196,101

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

96,332

85,369

97,776

Services and solutions

37,316

15,154

6,904

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

20,280

7,647

$ 4,662

As Reported

228,366

181,634

2,871

1,444

119,483

94,460

108,883

87,174

106,561

78,367

2,322

8,807

Net (loss) income per common share, diluted (USD per share)

$ 1,303

$ 9,366

$ 0.05

$ 0.35

50,817

$ 50,817

2,613

3,032

2,613

$ 3,032

6,665

9,211

6,665

9,211

1,291

269

1,291

269

2,413

2,113

2,413

2,113

510

654

510

654

As Reported | Hardware product

330,280

319,144

330,280

319,144

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

191,050

166,480

As Reported | Services and solutions

96,332

85,369

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

37,316

15,154

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

20,280

7,647

ASU 2014-09

226,893

181,340

2,871

1,444

117,839

94,107

109,054

87,233

106,272

78,367

2,782

8,866

Net (loss) income per common share, diluted (USD per share)

$ 1,631

$ 9,403

$ 0.06

$ 0.35

49,819

$ 49,819

3,498

3,204

3,498

$ 3,204

6,600

9,278

6,600

9,278

2,490

537

2,490

537

3,011

2,582

3,011

2,582

720

807

720

807

ASU 2014-09 | Hardware product

330,493

319,029

330,493

319,029

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

191,050

166,480

ASU 2014-09 | Services and solutions

96,332

85,369

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

35,843

14,860

ASU 2014-09 | Impact of Adoption

18,636

7,294

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

(1,473)

(294)

(1,644)

(353)

171

(289)

460

Net (loss) income per common share, diluted (USD per share)

$ 328

$ 37

$ 0.01

$ 0.00

(998)

$ (998)

885

172

885

$ 172

(65)

1,199

268

1,199

268

598

469

598

469

210

153

210

153

ASU 2014-09 | Impact of Adoption | Hardware product

$ 213

$ (115)

213

(115)

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

ASU 2014-09 | Impact of Adoption | Services and solutions

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

(1,473)

(294)

$ (1,644)

$ (353)

[1]	During fiscal 2018, we recorded net tax expenses of $1.5 million and in fiscal 2017, we recorded net tax benefits of $1.0 million, respectively. We recorded tax expense of $2.8 million in the first quarter of fiscal 2018, $0.2 million in the second quarter of fiscal 2018 and $0.1 million in the third quarter of fiscal 2018 resulting from new U.S. tax legislation that was enacted during the first quarter of fiscal 2018 and the adoption of ASU 2016-09 relating to the accounting for the tax effects of stock compensation. In the fourth quarter of fiscal 2018, we recorded a net tax benefit of $1.5 million for the release of a valuation allowance against U.S. federal capital loss carryforward due to expected capital gains tax in fiscal 2019 resulting from the sale of our corporate headquarters building in October 2018 (see Note 18 to the Consolidated Financial Statements) along with U.S., state and foreign prior year true-up provision to return.We recorded a benefit of $0.1 million in the first quarter of fiscal 2017 resulting from reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the third quarter of fiscal 2017, we recorded a tax benefit of $0.7 million from reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the fourth quarter of fiscal 2017, we recorded a net tax benefit of $0.2 million, primarily from the reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions and state and foreign prior year true-up provision to return.
[2]	For continuing operations, we recorded business restructuring charges of $0.2 million ($0.1 million after tax) in the third quarter of fiscal 2018 and $0.1 million ($0.1 million after tax) in the fourth quarter of fiscal 2018. We also recorded business restructuring charges of $2.5 million ($1.6 million after tax) in the third quarter of fiscal 2017.
[3]	Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts.

Acquisition (Details)						12 Months Ended
Acquisition (Details)	Jan. 22, 2018 USD ($)	Oct. 20, 2017 USD ($)	Jan. 09, 2017 USD ($)	Nov. 01, 2016 USD ($)	Oct. 05, 2015 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2016 USD ($)
Business Acquisition [Line Items]
Goodwill						$ 154,535,000	$ 131,995,000				$ 109,448,000
Accelerated Concepts
Business Acquisition [Line Items]
Cash paid at closing	$ 16,430,000
Cash acquired	$ 200,000
Earn-out payment installment period	2
Goodwill	$ 5,664,000
Weighted average useful life of acquired intangibles	5 years 6 months
Acquisition costs						300,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual						22,200,000
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual						2,800,000
TempAlert
Business Acquisition [Line Items]
Cash paid at closing		$ 40,741,000
Cash acquired		600,000
Goodwill		$ 17,552,000
Weighted average useful life of acquired intangibles		6 years 6 months
Acquisition costs						1,400,000	400,000
Payments to Acquire Business Gross before working capital adjustments		$ 45,000,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual						17,000,000
SMART Temps
Business Acquisition [Line Items]
Cash paid at closing			$ 28,800,000
Cash acquired			500,000
Goodwill			18,800,000
FreshTemp
Business Acquisition [Line Items]
Cash paid at closing				$ 1,700,000
Earn-out payment maximum				2,300,000
Goodwill				2,700,000
Bluenica Corporation
Business Acquisition [Line Items]
Cash paid at closing					$ 2,900,000
Business Combination, Contingent Liability, Payout Period					4 years
Earn-out payment maximum					$ 11,600,000
Goodwill					11,000,000
Purchased and Core Technology \| Accelerated Concepts
Business Acquisition [Line Items]
Estimated useful life of finite lived intangibles	5 years
Purchased and Core Technology \| TempAlert
Business Acquisition [Line Items]
Estimated useful life of finite lived intangibles		5 years
Customer Relationships \| Accelerated Concepts
Business Acquisition [Line Items]
Estimated useful life of finite lived intangibles	7 years
Customer Relationships \| TempAlert
Business Acquisition [Line Items]
Estimated useful life of finite lived intangibles		7 years
Trademarks and Trade Names \| Accelerated Concepts
Business Acquisition [Line Items]
Estimated useful life of finite lived intangibles	5 years
Trademarks and Trade Names \| TempAlert
Business Acquisition [Line Items]
Estimated useful life of finite lived intangibles		5 years
Order backlog \| Accelerated Concepts
Business Acquisition [Line Items]
Estimated useful life of finite lived intangibles	1 year
Earn-out payments \| Accelerated Concepts
Business Acquisition [Line Items]
Earn-out payment maximum	$ 4,500,000
Earn-out payments \| SMART Temps
Business Acquisition [Line Items]
Earn-out payment maximum			7,200,000
Additional earn-out payment \| Accelerated Concepts
Business Acquisition [Line Items]
Earn-out payment maximum	2,000,000
Additional earn-out payment \| Bluenica Corporation
Business Acquisition [Line Items]
Earn-out payment maximum					3,500,000
Fair Value, Measurements, Recurring \| Contingent Consideration \| Estimate of Fair Value Measurement
Business Acquisition [Line Items]
Contingent consideration fair value						10,065,000	$ 6,388,000
Fair Value, Measurements, Recurring \| Contingent Consideration \| Estimate of Fair Value Measurement \| Accelerated Concepts
Business Acquisition [Line Items]
Contingent consideration fair value	$ 2,300,000					4,400,000
Fair Value, Measurements, Recurring \| Contingent Consideration \| Estimate of Fair Value Measurement \| TempAlert
Business Acquisition [Line Items]
Contingent consideration fair value		$ 0				0
Fair Value, Measurements, Recurring \| Contingent Consideration \| Estimate of Fair Value Measurement \| SMART Temps
Business Acquisition [Line Items]
Contingent consideration fair value			$ 10,000							$ 0
Fair Value, Measurements, Recurring \| Contingent Consideration \| Estimate of Fair Value Measurement \| FreshTemp
Business Acquisition [Line Items]
Contingent consideration fair value				$ 1,300,000		200,000
Fair Value, Measurements, Recurring \| Contingent Consideration \| Estimate of Fair Value Measurement \| Bluenica Corporation
Business Acquisition [Line Items]
Contingent consideration fair value					$ 10,400,000	$ 5,500,000
Forecast \| Earn-out payments \| TempAlert
Business Acquisition [Line Items]
Earn-out payment maximum								$ 45,000,000	$ 35,000,000

Acquisition (Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands	Jan. 22, 2018	Oct. 20, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Business Acquisition [Line Items]
Goodwill			$ 154,535	$ 131,995	$ 109,448
Accelerated Concepts
Business Acquisition [Line Items]
Cash	$ 16,430
Fair value of contingent consideration on acquired business	2,300
Total purchase price consideration	18,730
Fair value of net tangible assets acquired	766
Goodwill	5,664
Total assets acquired and liabilities assumed	18,730
TempAlert
Business Acquisition [Line Items]
Cash		$ 40,741
Fair value of contingent consideration on acquired business		0
Total purchase price consideration		40,741
Fair value of net tangible assets acquired		(1,111)
Goodwill		17,552
Total assets acquired and liabilities assumed		40,741
Purchased and Core Technology \| Accelerated Concepts
Business Acquisition [Line Items]
Fair value of identifiable intangible assets acquired	3,000
Purchased and Core Technology \| TempAlert
Business Acquisition [Line Items]
Fair value of identifiable intangible assets acquired		4,000
Customer Relationships \| Accelerated Concepts
Business Acquisition [Line Items]
Fair value of identifiable intangible assets acquired	6,500
Customer Relationships \| TempAlert
Business Acquisition [Line Items]
Fair value of identifiable intangible assets acquired		18,300
Trademarks and Trade Names \| Accelerated Concepts
Business Acquisition [Line Items]
Fair value of identifiable intangible assets acquired	1,000
Trademarks and Trade Names \| TempAlert
Business Acquisition [Line Items]
Fair value of identifiable intangible assets acquired		$ 2,000
Order backlog \| Accelerated Concepts
Business Acquisition [Line Items]
Fair value of identifiable intangible assets acquired	$ 1,800

Acquisition Pro Forma (Details) - USD ($) $ in Thousands	12 Months Ended
Acquisition Pro Forma (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017
Business Combinations [Abstract]
Revenue	$ 233,789	$ 213,505
Net income	$ 1,314	$ 4,117

Discontinued Operations (Details) - Etherios, Inc. - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Oct. 31, 2017	Oct. 31, 2016	Sep. 30, 2016	Oct. 23, 2017	Oct. 23, 2016
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration receivable				$ 2,000	$ 3,000
Proceeds from Divestiture of Business	$ 2,000	$ 3,000
Income tax benefit on discontinued operations			$ 476

Debt Securities, Available-for-sale [Line Items]

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.

+ References + Details

Discontinued Operations (Income (loss) from Discontinued Operations, Net of Tax) (Details) - Etherios, Inc. - Discontinued Operations, Disposed of by Sale $ in Thousands	12 Months Ended
	Sep. 30, 2016 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Service revenue	$ 891
Cost of service	713
Gross profit	178
Operating expenses:
Sales and marketing	148
Research and development	103
General and administrative	43
Total operating expenses	294
Loss from discontinued operations, before income taxes	(116)
Gain on sale of discontinued operations, before income taxes	2,870
Income from discontinued operations, before income taxes	2,754
Income tax benefit on discontinued operations	(476)
Income from discontinued operations, after income taxes	$ 3,230

Goodwill and other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 122,910	$ 86,308
Accumulated amortization	(83,590)	(74,508)
Net	39,320	11,800
Purchased and Core Technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	58,102	51,292
Accumulated amortization	(48,693)	(46,304)
Net	9,409	4,988
License Agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	102	18
Accumulated amortization	(46)	(17)
Net	56	1
Patents and Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	15,701	12,484
Accumulated amortization	(12,242)	(11,280)
Net	3,459	1,204
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	46,605	21,914
Accumulated amortization	(21,049)	(16,817)
Net	25,556	5,097
Non-compete Agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	600	600
Accumulated amortization	(210)	(90)
Net	390	510
Order backlog
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	1,800	0
Accumulated amortization	(1,350)	0
Net	$ 450	$ 0

Goodwill and other Identifiable Intangible Assets (Amortization Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Finite-Lived Intangible Assets [Line Items]
2019	$ 8,888
2020	8,118
2021	7,422
2022	6,554
2023	4,362
Cost of Sales and General and Administrative Expense [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 9,435	$ 2,597	$ 1,842

Goodwill and other Identifiable Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Goodwill [Roll Forward]
Beginning balance	$ 131,995	$ 109,448
Acquisitions	23,216	21,465
Foreign currency translation adjustment	(676)	1,082
Ending balance	$ 154,535	$ 131,995

Segment Information and Major Customers Summary of Operating Results by Segment (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2018 USD ($) segment	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| segment									2
Revenue	$ 65,662	$ 62,716	$ 54,791	$ 45,197	$ 45,105	$ 45,739	$ 45,615	$ 45,175	$ 228,366	$ 181,634	$ 203,005
Operating income (loss)									2,322	8,807	17,105
Depreciation and amortization									12,270	5,497	4,584
IoT Products & Services
Segment Reporting Information [Line Items]
Revenue									201,506	174,237	202,294
Operating income (loss)									14,923	12,804	18,822
Depreciation and amortization									6,040	3,575	4,040
IoT Solutions
Segment Reporting Information [Line Items]
Revenue									26,860	7,397	711
Operating income (loss)									(12,601)	(3,997)	(1,717)
Depreciation and amortization									$ 6,230	$ 1,922	$ 544

Segment Information and Major Customers Total Assets by Segment (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting, Asset Reconciling Item [Line Items]
Total Assets	$ 371,125	$ 345,189
IoT Products & Services
Segment Reporting, Asset Reconciling Item [Line Items]
Total Assets	209,574	182,555
IoT Solutions
Segment Reporting, Asset Reconciling Item [Line Items]
Total Assets	98,801	47,644
Unallocated
Segment Reporting, Asset Reconciling Item [Line Items]
Total Assets	$ 62,750	$ 114,990

Segment Information and Major Customers Goodwill by Segment (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Jun. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Segment Reporting, Other Significant Reconciling Item [Line Items]
Goodwill	$ 154,535		$ 131,995	$ 109,448
IoT Products & Services
Segment Reporting, Other Significant Reconciling Item [Line Items]
Goodwill	104,358	$ 104,600	98,981
IoT Solutions
Segment Reporting, Other Significant Reconciling Item [Line Items]
Goodwill	$ 50,177	$ 50,000	$ 33,014

Segment Information and Major Customers Net Property, Equipment and Improvements by Segment (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Net property, equipment and improvements	$ 6,270	$ 12,801
North America, primarily United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Net property, equipment and improvements	6,156	12,648
International, primarily Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Net property, equipment and improvements	$ 114	$ 153

Segment Information and Major Customers Geographic revenue (Details) $ in Thousands		3 Months Ended								12 Months Ended
	Sep. 30, 2018 customer	Sep. 30, 2018 USD ($) customer	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($) customer	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2018 USD ($) customer	Sep. 30, 2017 USD ($) customer	Sep. 30, 2016 USD ($) customer
Segment Reporting Information [Line Items]
Revenues		$ 65,662	$ 62,716	$ 54,791	$ 45,197	$ 45,105	$ 45,739	$ 45,615	$ 45,175	$ 228,366	$ 181,634	$ 203,005
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	1	1				0				1	0
Accounts Receivable
Segment Reporting Information [Line Items]
Percentage of concentration	12.00%
North America, primarily United States
Segment Reporting Information [Line Items]
Revenues										$ 163,397	$ 117,749	$ 131,457
United States \| U.S. Export Net Sales
Segment Reporting Information [Line Items]
Percentage of concentration										29.90%	37.10%	38.70%
Europe, Middle East and Africa
Segment Reporting Information [Line Items]
Revenues										$ 39,211	$ 39,403	$ 44,932
Asia
Segment Reporting Information [Line Items]
Revenues										20,881	19,892	20,390
Latin America
Segment Reporting Information [Line Items]
Revenues										$ 4,877	$ 4,590	$ 6,226

Selected Balance Sheet Data (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017
Accounts receivable, net:
Accounts receivable	$ 54,451	$ 31,365
Less allowance for doubtful accounts	1,074	341
Less reserve for future returns and pricing adjustments	2,560	2,169
Total accounts receivable, net	50,817	28,855
Inventories:
Raw materials	22,047	24,050
Work in process	525	484
Finished goods	19,072	5,704
Total Inventories	41,644	30,238
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	27,725	39,944
Less accumulated depreciation and amortization	21,455	27,143
Total property, equipment and improvements, net	6,270	12,801
Land
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	570	1,800
Buildings
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	2,338	10,522
Improvements
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	1,698	3,445
Equipment
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	15,803	17,133
Purchased Software
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	3,966	3,571
Furniture and Fixtures
Property, Plant and Equipment, Net
Total property, equipment and improvements, gross	$ 3,350	$ 3,473

Selected Balance Sheet Data Assets Held for Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017
Statement of Financial Position [Abstract]
Assets held for sale	$ 5,220	$ 0

Marketable Securities (Details) $ in Thousands	12 Months Ended
Marketable Securities (Details) $ in Thousands	Sep. 30, 2018 USD ($) Security	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)
Debt Securities, Available-for-sale [Line Items]
Available-for-sale Securities, Total Number of Securities	19
Proceeds from Sale and Maturity of Debt Securities, Available-for-sale \| $	$ 32,032	$ 87,105	$ 73,706
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions	19
Current Assets
Debt Securities, Available-for-sale [Line Items]
Available-For-Sale Securities, Next Twelve Months, Maximum Year Mature	1 year
Non-current Assets
Debt Securities, Available-for-sale [Line Items]
Available-for sale Securities, Debt Maturities, Year Two Through Five, Maximum Year Mature	2 years

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

Sep. 30, 2018

Sep. 30, 2017

Available-for-sale securities, amortized cost basis

$ 4,756

^[1]

$ 36,788

^[2]

Available-for-sale marketable securities, fair value

(20)

(24)

4,736

^[1]

36,768

^[2]

Purchased and accrued interest

211

Current Assets

Debt Securities, Available-for-sale [Line Items]

Available-for-sale securities, amortized cost basis

32,031

Available-for-sale marketable securities, fair value

(20)

32,015

Current Assets | Corporate bonds

Debt Securities, Available-for-sale [Line Items]

Available-for-sale securities, amortized cost basis

28,275

Available-for-sale marketable securities, fair value

(20)

28,255

Current Assets | Certificates of deposit

Debt Securities, Available-for-sale [Line Items]

Available-for-sale securities, amortized cost basis

4,756

3,756

Available-for-sale marketable securities, fair value

(20)

$ 4,736

3,760

Non-current Assets | Certificates of deposit

Debt Securities, Available-for-sale [Line Items]

Available-for-sale securities, amortized cost basis

4,757

Available-for-sale marketable securities, fair value

(4)

$ 4,753

[1]	Included in amortized cost and fair value is purchased and accrued interest of $6.
[2]	Included in amortized cost and fair value is purchased and accrued interest of $211

Marketable Securities (Fair Value and Gross Unrealized Losses for AFS) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 0	$ 29,947
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	0	(24)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	4,736	0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	(20)	0
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months		26,196
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss		(20)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer		0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss		0
Certificates of deposit
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	0	3,751
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	0	(4)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	4,736	0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ (20)	$ 0

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

Sep. 30, 2018

Sep. 30, 2017

Jun. 30, 2017

Sep. 30, 2016

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

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

$ 4,736

^[1]

$ 36,768

^[2]

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

24,318

39,524

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

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

4,736

36,768

Fair Value, Inputs, Level 3

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

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

10,065

6,388

$ 6,388

$ 9,960

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

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

10,065

6,388

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

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

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

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

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

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

10,065

6,388

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

24,318

39,524

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

28,255

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

4,736

8,513

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]

29,054

76,292

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

10,065

6,388

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

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

10,065

6,388

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

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

24,318

39,524

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

28,255

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

Quarterly Financial Information Disclosure [Abstract]

$ 4,736

$ 8,513

[1]	Included in amortized cost and fair value is purchased and accrued interest of $6.
[2]	Included in amortized cost and fair value is purchased and accrued interest of $211

Fair Value Measurements (Reconciliation of Liability) (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value at beginning of period	$ 6,388	$ 9,960
Purchase price contingent consideration	2,300	1,310
Contingent consideration payments	0	(518)
Change in fair value of contingent consideration	1,377	(4,364)
Fair value at end of period	$ 10,065	$ 6,388

Fair Value Measurements (Details) - USD ($)		1 Months Ended	12 Months Ended
Fair Value Measurements (Details) - USD ($)	Oct. 05, 2015	Nov. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016	Jan. 22, 2018	Dec. 31, 2017	Oct. 20, 2017	Jun. 30, 2017	Jan. 09, 2017	Nov. 01, 2016
Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration fair value			$ 10,065,000	$ 6,388,000	$ 9,960,000				$ 6,388,000
Contingent Consideration \| Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration fair value			$ 10,065,000	6,388,000
Accelerated Concepts \| Minimum \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value inputs probability of payment			44.40%
Accelerated Concepts \| Maximum \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value inputs probability of payment			100.00%
Bluenica Corporation
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Business Combination, Contingent Liability, Payout Period	4 years
Bluenica Corporation \| Maximum \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value inputs probability of payment			98.60%
Bluenica Corporation \| Contingent Consideration \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Payment for Contingent Consideration Liability, Investing Activities				0	$ 500,000
FreshTemp \| Maximum \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value inputs probability of payment			100.00%
SMART Temps \| Maximum \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value inputs probability of payment			0.00%
Estimate of Fair Value Measurement \| Contingent Consideration \| Fair Value, Measurements, Recurring
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration fair value			$ 10,065,000	$ 6,388,000
Estimate of Fair Value Measurement \| TempAlert \| Contingent Consideration \| Fair Value, Measurements, Recurring
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration fair value			0					$ 0
Estimate of Fair Value Measurement \| Accelerated Concepts \| Contingent Consideration \| Fair Value, Measurements, Recurring
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration fair value			4,400,000			$ 2,300,000
Estimate of Fair Value Measurement \| Bluenica Corporation \| Contingent Consideration \| Fair Value, Measurements, Recurring
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration fair value	$ 10,400,000		5,500,000
Estimate of Fair Value Measurement \| FreshTemp \| Contingent Consideration \| Fair Value, Measurements, Recurring
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration fair value			$ 200,000								$ 1,300,000
Estimate of Fair Value Measurement \| SMART Temps \| Contingent Consideration \| Fair Value, Measurements, Recurring
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration fair value							$ 0			$ 10,000
Subsequent Event \| Estimate of Fair Value Measurement \| FreshTemp \| Contingent Consideration \| Fair Value, Measurements, Recurring
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Payment for Contingent Consideration Liability, Investing Activities		$ 200,000

Product Warranty Obligation (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Standard Product Warranty Accrual [Roll Forward]
Beginning balance	$ 987	$ 1,033	$ 1,014
Warranties issued	759	679	771
Settlements made	(574)	(725)	(752)
Ending balance	$ 1,172	$ 987	$ 1,033

Restructuring (Details) $ in Thousands	1 Months Ended	3 Months Ended				6 Months Ended	12 Months Ended
Restructuring (Details) $ in Thousands	May 31, 2017 employee	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) employee	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($) employee	Sep. 30, 2016 USD ($)
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance							$ 453	$ 1,656	$ 0	$ 0
Restructuring charge		$ 100	$ 200		$ 2,500			504	2,515	753
Payments for restructuring								(1,553)	(986)	(754)
Restructuring reversals								(202)		(6)
Restructuring foreign currency fluctuation								48	127	7
Restructuring reserve, ending balance		453		$ 1,656		$ 453		453	1,656	0
Employee Severance \| Manufacturing Transition
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance							147	0	0	0
Restructuring charge								504	0	0
Payments for restructuring								(357)	0	0
Restructuring reversals								0		0
Restructuring foreign currency fluctuation								0	0	0
Restructuring reserve, ending balance		147		0		147		147	0	0
Employee Severance \| 2017 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance							293	1,528	0	0
Restructuring charge								0	2,258	0
Payments for restructuring								(1,035)	(845)	0
Restructuring reversals								(244)		0
Restructuring foreign currency fluctuation								44	115	0
Restructuring reserve, ending balance		293		1,528		293		293	1,528	0
Employee Severance \| 2016 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance							0	0	0	0
Restructuring charge								0	0	558
Payments for restructuring								0	0	(559)
Restructuring reversals								0		(6)
Restructuring foreign currency fluctuation								0	0	7
Restructuring reserve, ending balance		0		0		0		0	0	0
Facility Closing \| 2017 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance							13	128	0	0
Restructuring charge								0	257	0
Payments for restructuring								(161)	(141)	0
Restructuring reversals								42		0
Restructuring foreign currency fluctuation								4	12	0
Restructuring reserve, ending balance		13		128		13		13	128	0
Facility Closing \| 2016 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance							0	0	0	0
Restructuring charge								0	0	195
Payments for restructuring								0	0	(195)
Restructuring reversals								0		0
Restructuring foreign currency fluctuation								0	0	0
Restructuring reserve, ending balance		$ 0		0		$ 0		$ 0	$ 0	$ 0
UNITED STATES \| 2016 Restructuring
Restructuring Cost and Reserve [Line Items]
Number of positions eliminated \| employee									5
UNITED STATES \| Employee Severance \| 2016 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring charge									$ 100
GERMANY \| 2016 Restructuring
Restructuring Cost and Reserve [Line Items]
Number of positions eliminated \| employee									10
Restructuring Reserve [Roll Forward]
Restructuring charge									$ 700
GERMANY \| Employee Severance \| 2016 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring charge									500
GERMANY \| Facility Closing \| 2016 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring charge									$ 200
IoT Products & Services \| Manufacturing Transition
Restructuring Cost and Reserve [Line Items]
Number of positions eliminated \| employee						51
IoT Products & Services \| 2017 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring charge				2,500
IoT Products & Services \| Employee Severance \| Manufacturing Transition
Restructuring Reserve [Roll Forward]
Restructuring charge						$ 500
IoT Products & Services \| Employee Severance \| 2017 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring charge				2,300
IoT Products & Services \| Facility Closing \| 2017 Restructuring
Restructuring Reserve [Roll Forward]
Restructuring charge				$ 200
IoT Products & Services \| UNITED STATES \| 2017 Restructuring
Restructuring Cost and Reserve [Line Items]
Number of positions eliminated \| employee	10
IoT Products & Services \| FRANCE \| 2017 Restructuring
Restructuring Cost and Reserve [Line Items]
Number of positions eliminated \| employee	8
Minimum \| Forecast \| IoT Products & Services \| Manufacturing Transition
Restructuring Cost and Reserve [Line Items]
Effect on future earnings							3,000
Maximum \| Forecast \| IoT Products & Services \| Manufacturing Transition
Restructuring Cost and Reserve [Line Items]
Effect on future earnings							$ 5,000

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended							12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Tax Credit Carryforward [Line Items]
U.S. capital loss carryforward	$ 3,500							$ 3,500
Valuation allowance	3,291				$ 5,952			3,291	$ 5,952
Net discrete tax expense (benefits)	(1,500)	$ 100	$ 200	$ 2,800	(200)	$ (700)	$ (100)	1,500	(1,000)	$ (1,500)
Income tax provision								1,487	125	3,212
Release of valuation allowance								1,317	0	$ 0
Release of valuation allowance related to sale of corporate headquarters								1,100
Accrued income tax penalties and interest for unrecognized tax benefits	100				$ 100			100	$ 100
Accumulated undistributed foreign earnings	4,000							4,000
United States Federal Tax Jurisdiction
Tax Credit Carryforward [Line Items]
Federal and state research and development tax credits	3,600							3,600
U.S. capital loss carryforward	3,200							3,200
Foreign Tax Authority
Tax Credit Carryforward [Line Items]
Non-U.S. operating losses	$ 300							300
ASU 2016-09
Tax Credit Carryforward [Line Items]
Tax deficiency from exercise of stock options								600
Tax Cuts and Jobs Act of 2017 [Member]
Tax Credit Carryforward [Line Items]
Income tax provision								3,000
Tax Cuts and Jobs Act of 2017, Remeasurement Of Deferred Tax [Member]
Tax Credit Carryforward [Line Items]
Income tax provision								2,700
Tax Cuts and Jobs Act of 2017, One Time Transition Tax For Foreign Subsidiaries [Member]
Tax Credit Carryforward [Line Items]
Income tax provision								$ 300

Income Taxes (Income Taxes) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Income Tax Disclosure [Abstract]
United States	$ (2,887)	$ 5,170	$ 9,841
International	5,677	4,321	6,849
Income from continuing operations, before income taxes	$ 2,790	$ 9,491	$ 16,690

Income Taxes (Income Tax Provision) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Current:
Federal	$ 526	$ 312	$ (141)
State	57	165	139
Foreign	1,412	1,756	2,099
Deferred:
U.S.	(668)	(1,454)	1,260
Foreign	160	(654)	(145)
Income tax provision	$ 1,487	$ 125	$ 3,212

Income Taxes (Deferred Tax Assets) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Non-current deferred tax asset	$ 6,665	$ 9,211
Non-current deferred tax liability	(334)	(534)
Net deferred tax asset	6,331	8,677
Uncollectible accounts and other reserves	1,000	1,063
Depreciation and amortization	(369)	(673)
Inventories	740	824
Compensation costs	3,388	5,863
Tax carryforwards	7,063	7,514
Valuation allowance	(3,291)	(5,952)
Identifiable intangible assets	(2,298)	(581)
Other	98	619
Net deferred tax asset	$ 6,331	$ 8,677

Income Taxes (Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Income Tax Disclosure [Abstract]
Statutory income tax amount	$ 1,001	$ 2,917	$ 5,548
State taxes, net of federal benefits	(312)	(125)	204
Manufacturing deduction	(364)	(150)	(450)
Meals and entertainment	82	63	55
Transaction costs	79	0	0
Employee stock purchase plan	56	79	83
Foreign operations	(3)	218	276
Valuation allowance - current year increase	275	159	(43)
Utilization of tax credits	(1,609)	(1,168)	(1,116)
Valuation allowance	(1,317)	0	0
Discrete tax benefits	(765)	(954)	(1,461)
One-time transition tax	250	0	0
Deferred balance sheet remeasure	2,727	0	0
ASU 2016-09 excess stock compensation	643	0	0
Contingent consideration	388	(1,172)	(154)
Adjustment of tax contingency reserves	315	257	202
Other, net	41	1	68
Income tax provision	$ 1,487	$ 125	$ 3,212

Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefits, beginning balance	$ 1,335	$ 1,708	$ 1,618
Increases related to prior year income tax positions	39	21	107
Increases related to current year income tax positions	315	257	240
Decreases related to prior year income tax positions	0	0	(71)
Decreases related to settlements	0	0	(30)
Decreases related to expiration of statute of limitations	(128)	(651)	(156)
Unrecognized tax benefits, ending balance	$ 1,561	$ 1,335	$ 1,708

Income Taxes (Unrecognized Tax Benefits, Additional Information) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2015
Income Tax Contingency [Line Items]
Unrecognized tax benefits that would impact effective tax rate	$ 1,400
Unrecognized tax benefits	1,561	$ 1,335	$ 1,708	$ 1,618
Accrued income tax penalties and interest for unrecognized tax benefits	100	$ 100
Noncurrent income taxes payable
Income Tax Contingency [Line Items]
Unrecognized tax benefits	800
Noncurrent deferred tax assets
Income Tax Contingency [Line Items]
Unrecognized tax benefits	$ 800

Stock-Based Compensation (Details) - USD ($) $ in Thousands		12 Months Ended
Stock-Based Compensation (Details) - USD ($) $ in Thousands	Jan. 25, 2010	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016	Jan. 29, 2018	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		$ 1,115	$ 685	$ 896
Shares Paid for Tax Withholding for Share Based Compensation		74,204	49,684	47,464
Adjustments Related to Tax Withholding for Share-based Compensation		$ 700	$ 700	$ 600
Proceeds from stock option plan transactions		5,460	3,502	7,191
Total intrinsic value of all options exercised		1,200	900	1,900
Total grant date fair value of shares vested		3,300	2,400	2,900
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost nonvested awards		$ 4,400
Weighted average period, unrecognized compensation cost, nonvested awards		2 years 10 months
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average period, unrecognized compensation cost, nonvested awards		1 year 4 months
Total unrecognized compensation cost, restricted stock units		$ 5,300
The 2018 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		1,313,651
The 2018 Plan \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period		7 years
Vesting period		4 years
The 2016 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized						1,500,000
The 2016 Plan \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period		7 years
Vesting period		4 years
The 2014 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized							2,250,000
The 2014 Plan \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period		8 years
Vesting period		4 years
The 2013 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized								1,750,000
The 2013 Plan \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period		8 years
Vesting period		4 years
The Omnibus Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized									5,750,000
Number of additional shares authorized	2,500,000
The Purchase Plan \| The Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized							2,800,000
Proceeds from employee stock purchase plan transactions		$ 1,100	$ 700	$ 900
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		125,446	72,594	103,915
Shares available for future issuance		315,576
Director \| The 2018 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		1 year
Director \| The 2016 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		1 year
Director \| The 2014 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		1 year
Director \| The 2013 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		1 year
Executives and Employees \| The 2018 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		4 years
Executives and Employees \| The 2016 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		4 years
Executives and Employees \| The 2014 Plan \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		4 years

Stock-Based Compensation (Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	$ 4,854	$ 4,659	$ 3,649
Income tax benefit	(1,017)	(1,536)	(1,185)
Stock-based compensation after income taxes	3,837	3,123	2,464
Cost of Sales
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	195	213	215
Sales and Marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	1,492	1,348	921
Research and Development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	516	656	590
General and Administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	$ 2,651	$ 2,442	$ 1,923

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, 2018 USD ($) $ / shares shares
Options Outstanding [Roll Forward]
Options Outstanding, Beginning Balance \| shares	3,902
Options Outstanding, Granted \| shares	863
Options Outstanding, Exercised \| shares	(597)
Options Outstanding, Forfeited / Cancelled \| shares	(642)
Options Outstanding, Ending Balance \| shares	3,526
Options Outstanding, Exercisable \| shares	2,245
Weighted Average Exercise Price [Roll Forward]
Weighted Average Exercise Price, Beginning Balance	$ 10.54
Weighted Average Exercise Price, Granted	10.92
Weighted Average Exercise Price, Exercised	9.14
Weighted Average Exercise Price, Forfeited / Cancelled	12.64
Weighted Average Exercise Price, Ending Balance	10.49
Weighted Average Exercise Price, Exercisable	$ 10.09
Weighted Average Remaining Contractual Term [Abstract]
Weighted Average Remaining Contractual Term, Outstanding	4 years 2 months 12 days
Weighted Average Remaining Contractual Term, Exercisable	3 years 4 months
Aggregate Intrinsic Value [Abstract]
Aggregate Intrinsic Value, Outstanding \| $	$ 10,470
Aggregate Intrinsic Value, Exercisable \| $	$ 7,558
Closing Stock Price	$ 13.45

Stock-Based Compensation (Fair Value Assumptions) (Details) - Stock Options - $ / shares	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average per option grant date fair value	$ 3.98	$ 4.63	$ 3.90
Assumptions Used For Options Grants [Abstract]
Risk free interest rate, minimum	2.12%	1.46%	1.22%
Risk free interest rate, maximum	2.89%	1.96%	1.85%
Expected term	6 years	6 years	6 years
Expected volatility rate, minimum	33.00%	33.00%	32.00%
Expected volatility rate, maximum	34.00%	34.00%	33.00%
Weighted average volatility	33.00%	34.00%	32.00%
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, 2018 $ / shares shares
$7.40 - $8.30
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	$ 7.40
Exercise Price Range, Upper Range	$ 8.30
Options Outstanding \| shares	694
Weighted Average Remaining Contractual Term	3 years 1 month 28 days
Weighted Average Exercise Price, Options Outstanding	$ 8.00
Number of Shares Vested, Options Exercisable \| shares	604
Weighted Average Exercise Price, Options Exercisable	$ 7.97
$8.31 - $9.68
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	8.31
Exercise Price Range, Upper Range	$ 9.68
Options Outstanding \| shares	551
Weighted Average Remaining Contractual Term	3 years 3 months 7 days
Weighted Average Exercise Price, Options Outstanding	$ 9.39
Number of Shares Vested, Options Exercisable \| shares	515
Weighted Average Exercise Price, Options Exercisable	$ 9.42
$9.69 - $10.33
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	$ 10.33
Options Outstanding \| shares	644
Weighted Average Remaining Contractual Term	5 years 4 months 17 days
Weighted Average Exercise Price, Options Outstanding	$ 10.14
Number of Shares Vested, Options Exercisable \| shares	129
Weighted Average Exercise Price, Options Exercisable	$ 9.89
$10.34 - $10.81
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	10.34
Exercise Price Range, Upper Range	$ 10.81
Options Outstanding \| shares	554
Weighted Average Remaining Contractual Term	3 years 9 months 15 days
Weighted Average Exercise Price, Options Outstanding	$ 10.63
Number of Shares Vested, Options Exercisable \| shares	421
Weighted Average Exercise Price, Options Exercisable	$ 10.72
$10.82 - $12.63
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	10.82
Exercise Price Range, Upper Range	$ 12.63
Options Outstanding \| shares	523
Weighted Average Remaining Contractual Term	4 years 4 months 10 days
Weighted Average Exercise Price, Options Outstanding	$ 12.00
Number of Shares Vested, Options Exercisable \| shares	379
Weighted Average Exercise Price, Options Exercisable	$ 11.99
$12.64 - $13.50
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	$ 13.50
Options Outstanding \| shares	548
Weighted Average Remaining Contractual Term	5 years 6 months 18 days
Weighted Average Exercise Price, Options Outstanding	$ 13.50
Number of Shares Vested, Options Exercisable \| shares	185
Weighted Average Exercise Price, Options Exercisable	$ 13.50
$7.40 - $14.75
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range	13.51
Exercise Price Range, Upper Range	$ 14.75
Options Outstanding \| shares	12
Weighted Average Remaining Contractual Term	2 years 9 months 26 days
Weighted Average Exercise Price, Options Outstanding	$ 14.75
Number of Shares Vested, Options Exercisable \| shares	12
Weighted Average Exercise Price, Options Exercisable	$ 14.75
$7.40 - $14.75
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	$ 14.75
Options Outstanding \| shares	3,526
Weighted Average Remaining Contractual Term	4 years 2 months 23 days
Weighted Average Exercise Price, Options Outstanding	$ 10.49
Number of Shares Vested, Options Exercisable \| shares	2,245
Weighted Average Exercise Price, Options Exercisable	$ 10.09

Stock-Based Compensation (Non-Vested Options) (Details) - Restricted Stock Units shares in Thousands	12 Months Ended
	Sep. 30, 2018 $ / shares shares
Nonvested Number of Restricted Stock Units [Roll Forward]
Number of Restricted Stock Units, Beginning Balance \| shares	566
Number of Restricted Stock Units, Granted \| shares	415
Number of Restricted Stock Units, Vested \| shares	(207)
Number of Restricted Stock Units, Canceled \| shares	(100)
Number of Restricted Stock Units, Ending Balance \| shares	674
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	$ 11.28
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Granted \| $ / shares	10.77
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Vested \| $ / shares	11.02
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Canceled \| $ / shares	11.21
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Ending Balance \| $ / shares	$ 11.05

Common Stock Repurchase (Details) - USD ($)	3 Months Ended	12 Months Ended
Common Stock Repurchase (Details) - USD ($)	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016	Apr. 24, 2018	May 02, 2017	Apr. 26, 2016
Shares repurchased, value		$ 748,000	$ 938,000	$ 550,000
May 2018 authorized repurchase program
Stock repurchase program, authorized amount					$ 20,000,000
Shares repurchased		0
May 2017 authorized repurchase program
Stock repurchase program, authorized amount						$ 20,000,000
Shares repurchased	28,691
Shares repurchased, value	$ 300,000
April 2016 authorized repurchase program
Stock repurchase program, authorized amount							$ 15,000,000
Shares repurchased		0

Employee Benefit Plans (Details) - USD ($) $ in Millions	12 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Millions	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Defined Contribution Plan Disclosure [Line Items]
Matching contributions, amount	$ 1.6	$ 1.4	$ 1.4
Defined contribution plan
Defined Contribution Plan Disclosure [Line Items]
Maximum annual contribution per employee percentage	25.00%
Defined contribution plan \| Full Employer Match
Defined Contribution Plan Disclosure [Line Items]
Employers percent of matching contributions	100.00%
Percent of employees' gross pay for employer match	3.00%
Defined contribution plan \| Half Employer Match
Defined Contribution Plan Disclosure [Line Items]
Employers percent of matching contributions	50.00%
Percent of employees' gross pay for employer match	2.00%

Commitments (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Leases, Operating [Abstract]
2019	$ 1,986
2020	1,675
2021	1,235
2022	1,054
2023	833
Thereafter	1,836
Total minimum payments required	$ 8,619

Commitments - Additional Information (Details) - USD ($) $ in Thousands	Oct. 31, 2018	Sep. 30, 2018
Operating Leased Assets [Line Items]
Minimum lease obligations		$ 8,619
Subsequent Event
Operating Leased Assets [Line Items]
Term of lease	13 years
Minimum lease obligations	$ 15,900

Commitments (Rent Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Leases, Operating [Abstract]
Rentals	$ 1,735	$ 1,342	$ 1,613
Less: sublease rentals	0	0	(46)
Total rental expense	$ 1,735	$ 1,342	$ 1,567

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

3 Months Ended

12 Months Ended

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2016

Sep. 30, 2018

Sep. 30, 2017

Sep. 30, 2016

Revenue

$ 65,662

$ 62,716

$ 54,791

$ 45,197

$ 45,105

$ 45,739

$ 45,615

$ 45,175

$ 228,366

$ 181,634

$ 203,005

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

30,963

29,329

26,654

21,937

21,334

22,485

21,902

21,453

108,883

87,174

99,680

Net (loss) income

$ 3,608

^[1],[2]

$ 2,621

^[1],[2]

$ (357)

^[1],[2]

$ (4,569)

^[1],[2]

$ 4,343

^[1],[2]

$ 1,335

^[1],[2]

$ 1,331

^[1],[2]

$ 2,357

^[1],[2]

$ 1,303

$ 9,366

$ 16,708

$ 0.13

$ 0.10

$ (0.01)

$ (0.17)

$ 0.16

$ 0.05

$ 0.09

$ 0.05

$ 0.35

$ 0.65

Net (loss) income per common share, diluted (USD per share)

$ 0.13

$ 0.09

$ (0.01)

$ (0.17)

$ 0.16

$ 0.05

$ 0.09

$ 0.05

$ 0.35

$ 0.64

^[3]

[1]	During fiscal 2018, we recorded net tax expenses of $1.5 million and in fiscal 2017, we recorded net tax benefits of $1.0 million, respectively. We recorded tax expense of $2.8 million in the first quarter of fiscal 2018, $0.2 million in the second quarter of fiscal 2018 and $0.1 million in the third quarter of fiscal 2018 resulting from new U.S. tax legislation that was enacted during the first quarter of fiscal 2018 and the adoption of ASU 2016-09 relating to the accounting for the tax effects of stock compensation. In the fourth quarter of fiscal 2018, we recorded a net tax benefit of $1.5 million for the release of a valuation allowance against U.S. federal capital loss carryforward due to expected capital gains tax in fiscal 2019 resulting from the sale of our corporate headquarters building in October 2018 (see Note 18 to the Consolidated Financial Statements) along with U.S., state and foreign prior year true-up provision to return.We recorded a benefit of $0.1 million in the first quarter of fiscal 2017 resulting from reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the third quarter of fiscal 2017, we recorded a tax benefit of $0.7 million from reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions. In the fourth quarter of fiscal 2017, we recorded a net tax benefit of $0.2 million, primarily from the reversal of income tax reserves due to the expiration of the statutes of limitation from various U.S. and foreign tax jurisdictions and state and foreign prior year true-up provision to return.
[2]	For continuing operations, we recorded business restructuring charges of $0.2 million ($0.1 million after tax) in the third quarter of fiscal 2018 and $0.1 million ($0.1 million after tax) in the fourth quarter of fiscal 2018. We also recorded business restructuring charges of $2.5 million ($1.6 million after tax) in the third quarter of fiscal 2017.
[3]	Earnings per share presented are calculated by line item and may not add due to the use of rounded amounts.

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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