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Income taxes | 12 Months Ended
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Mar. 31, 2020
Income Tax Disclosure [Abstract] |
Income taxes | Income taxes On March 27, 2020, the CARES Act was signed into law making several changes to the Internal Revenue Code. The changes include but are not limited to: increasing the limitation on the amount of deductible interest expense, allowing companies to carryback certain net operating losses and increasing the amount of net operating loss carryforwards that corporations can use to offset taxable income. The tax law changes in the CARES Act did not have a material impact on the Company’s income tax provision. The components of income (loss) before provision for income taxes are as follows (in thousands):
| Year ended March 31, |  | Three months ended March 31, (transition period) |  | Year ended December 31,
| 2020 |  | 2019 |  | 2018 |  | 2017
Domestic | $ | 24,479 |  |  | $ | (21,673 | ) |  | $ | 17,405 |  |  | $ | 22,409 |
Foreign | (410 | ) |  | 500 |  |  | 551 |  |  | 60 |
Total | $ | 24,069 |  |  | $ | (21,173 | ) |  | $ | 17,956 |  |  | $ | 22,469 |
The components of the benefit (provision) for income taxes are as follows (in thousands):
| Year ended March 31, |  | Three months ended March 31, (transition period) |  | Year ended December 31,
| 2020 |  | 2019 |  | 2018 |  | 2017
Current: |  |  |  |  |  |  |  |
U.S. federal | $ | (2,681 | ) |  | $ | (13 | ) |  | $ | (2,414 | ) |  | $ | (2,058 | )
State | (1,066 | ) |  | (139 | ) |  | (948 | ) |  | (369 | )
Foreign | 5 |  |  | (22 | ) |  | (8 | ) |  | — |
Total current | (3,742 | ) |  | (174 | ) |  | (3,370 | ) |  | (2,427 | )
Deferred: |  |  |  |  |  |  |  |  |  |  |
U.S. federal | (2,532 | ) |  | 3,096 |  |  | 1,005 |  |  | 13,246 |
State | 99 |  |  | 368 |  |  | 101 |  |  | (21 | )
Foreign | (10 | ) |  | (31 | ) |  | (167 | ) |  | 208 |
Total deferred | (2,443 | ) |  | 3,433 |  |  | 939 |  |  | 13,433 |
Total (provision) benefit for income taxes | $ | (6,185 | ) |  | $ | 3,259 |  |  | $ | (2,431 | ) |  | $ | 11,006 |
Effective January 1, 2018, the federal statutory rate decreased from 35% to 21% as a result of the enactment of the 2017 Tax Act. The following table presents a reconciliation of the federal statutory rate to the Company’s effective tax rate:
| Year ended March 31, |  | Three months ended March 31, (transition period) |  | Year ended December 31,
| 2020 |  | 2019 |  | 2018 |  | 2017
Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | % |  | 35.0 | %
Federal tax deferred rate change | — | % |  | — | % |  | — | % |  | (53.8 | )%
State tax, net of federal benefit | 3.7 | % |  | 1.2 | % |  | 2.6 | % |  | 0.6 | %
State tax deferred rate change, net of federal benefit | 0.1 | % |  | — | % |  | 0.9 | % |  | 0.9 | %
Nondeductible business expenses | 0.8 | % |  | (0.1 | )% |  | 1.4 | % |  | — | %
Provision-to-return adjustment | — | % |  | — | % |  | (3.9 | )% |  | — | %
Uncertain tax positions | (0.2 | )% |  | (0.1 | )% |  | (1.3 | )% |  | (1.7 | )%
Stock based compensation | (0.4 | )% |  | (6.1 | )% |  | (8.6 | )% |  | (28.1 | )%
Others | 0.7 | % |  | (0.5 | )% |  | 1.4 | % |  | (1.9 | )%
Effective tax rate | 25.7 | % |  | 15.4 | % |  | 13.5 | % |  | (49.0 | )%
The components of net deferred taxes arising from temporary differences are as follows (in thousands):
| March 31, 2020 |  | March 31, 2019 |  | December 31, 2018
Deferred tax assets: |  |  |  |  |
Compensation | $ | 760 |  |  | $ | 895 |  |  | $ | 928 |
Inventories and receivables | 3,472 |  |  | 2,915 |  |  | 3,008 |
Accrued expenses | 1,996 |  |  | 667 |  |  | 424 |
Stock compensation | 3,706 |  |  | 3,627 |  |  | 5,175 |
Net operating losses | 92 |  |  | 236 |  |  | 43 |
Right of use liability | 3,443 |  |  | 4,643 |  |  | — |
Other | 558 |  |  | 736 |  |  | 898 |
Deferred tax assets | 14,027 |  |  | 13,719 |  |  | 10,476 |
Deferred tax liabilities: |  |  |  |  |
Goodwill | 3,468 |  |  | 2,857 |  |  | 2,618 |
Fixed assets | 3,294 |  |  | 1,734 |  |  | 2,405 |
Intangible assets | 25,287 |  |  | 24,077 |  |  | 24,591 |
Right of use asset | 3,292 |  |  | 887 |  |  | — |
Other | 563 |  |  | 892 |  |  | 1,023 |
Deferred tax liabilities | 35,904 |  |  | 30,447 |  |  | 30,637 |
Net deferred tax liabilities | $ | 21,877 |  |  | $ | 16,728 |  |  | $ | 20,161 |
The deferred tax assets and liabilities are reported in the accompanying balance sheets as follows (in thousands):
| March 31, 2020 |  | March 31, 2019 |  | December 31, 2018
Deferred tax assets | $ | 15 |  |  | $ | 25 |  |  | $ | 56 |
Deferred tax liabilities | 21,892 |  |  | 16,753 |  |  | 20,217 |
Net deferred tax liabilities | $ | 21,877 |  |  | $ | 16,728 |  |  | $ | 20,161 |
At March 31, 2020, the Company had gross federal and state net operating loss carryforwards of $0.4 million and $0.3 million, respectively. The federal net operating loss carryforwards can either be carried forward 20 years or indefinitely. The state net operating loss carryforwards have a carryforward period of 5-20 years. The net operating loss carryforwards will begin to expire in 2037. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
| Year ended March 31, |  | Three months ended March 31, (transition period) |  | Year ended December 31,
| 2020 |  | 2019 |  | 2018 |  | 2017
Balance at beginning of year | $ | 581 |  |  | $ | 571 |  |  | $ | 764 |  |  | $ | 1,208 |
Increases for prior year tax positions | 32 |  |  | — |  |  | — |  |  | 63 |
Increases for current year tax positions | 90 |  |  | 10 |  |  | 173 |  |  | 68 |
Decreases for prior year tax positions | — |  |  | — |  |  | (8 | ) |  | (1 | )
Decreases due to settlements | (29 | ) |  | — |  |  | — |  |  | (32 | )
Decreases due to statutes lapsing | (197 | ) |  | — |  |  | (358 | ) |  | (542 | )
Balance at end of year | $ | 477 |  |  | $ | 581 |  |  | $ | 571 |  |  | $ | 764 |
If all of the Company’s unrecognized tax benefits as of March 31, 2020, March 31, 2019 and December 31, 2018 were recognized, $0.5 million, $0.4 million and $0.4 million of unrecognized tax benefits, respectively, would impact the effective tax rate. The Company believes it is reasonably possible that $0.1 million of unrecognized tax benefits may reverse in the next twelve months. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. The Company had $0.1 million of accrued gross interest and penalties as of March 31, 2020, March 31, 2019 and December 31, 2018. The Company recognized net interest and penalties expense of $23,000, $(40,000) and $17,000 and $3,000 for the year ended March 31, 2020, the year ended December 31, 2018, 2017 and the transition period for the three months ended March 31, 2019, respectively. The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. As of March 31, 2020, with few exceptions, the Company or its subsidiaries are no longer subject to examination prior to tax year ended December 31, 2016. Certain state returns are currently under audit by the state tax authorities. The Company does not expect the results of these audits to have a material impact on the consolidated financial statements.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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