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Income Taxes | 12 Months Ended
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Sep. 30, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | 9. INCOME TAXES: The components of our benefit (provision) from income taxes consisted of the following for the fiscal years ended September 30,
|  | 2013 |  |  | 2014 |  |  | 2015 |
|  | (Amounts in thousands) |
Current benefit (provision): |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (101 | ) |  | $ | (46 | ) |  | $ | (209 | )
State |  |  | 995 |  |  |  | (45 | ) |  |  | (87 | )
Total current benefit (provision) |  | $ | 894 |  |  | $ | (91 | ) |  | $ | (296 | )
Deferred benefit (provision): |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | — |  |  |  | — |  |  |  | 22,056 |
State |  |  | — |  |  |  | — |  |  |  | 5,654 |
Total deferred benefit (provision) |  |  | — |  |  |  | — |  |  |  | 27,710 |
Total income tax benefit (provision) |  | $ | 894 |  |  | $ | (91 | ) |  | $ | 27,414 |
Below is a reconciliation of the statutory federal income tax rate to our effective tax rate for the fiscal years ended September 30,
|  | 2013 |  |  | 2014 |  |  | 2015 |
Federal tax benefit (provision) |  |  | (35.0 | )% |  |  | (35.0 | )% |  |  | (35.0 | )%
State taxes, net of federal effect |  |  | 0.7 | % |  |  | (4.4 | )% |  |  | (3.2 | )%
Stock based compensation |  |  | (0.6 | )% |  |  | (0.2 | )% |  |  | (0.4 | )%
Valuation allowance |  |  | 45.0 | % |  |  | 42.5 | % |  |  | 171.5 | %
Foreign rate differential |  |  | (2.9 | )% |  |  | (3.0 | )% |  |  | (0.3 | )%
Other |  |  | (0.9 | )% |  |  | (0.7 | )% |  |  | (1.3 | )%
Effective tax rate |  |  | 6.3 | % |  |  | (0.8 | )% |  |  | 131.3 | %
Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. In addition, the company maintains an excess benefit for share based payments of $5.2 million which may be used to offset future income taxes payable. The tax effects of these temporary differences representing the components of deferred tax assets (liabilities) as of September 30,
|  | 2014 |  |  | 2015 |
|  | (Amounts in thousands) |
Current deferred tax assets: |  |  |  |  |  |  |  |
Inventories |  | $ | 1,712 |  |  | $ | 1,361 |
Accrued expenses |  |  | 1,110 |  |  | $ | 911 |
Tax loss carryforwards |  |  | - |  |  | $ | 7,560 |
Current deferred tax assets |  |  | 2,822 |  |  |  | 9,832 |
Valuation allowance |  |  | (2,822 | ) |  |  | (578 | )
Net current deferred tax assets |  | $ | — |  |  | $ | 9,254 |
Long-term deferred tax assets: |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 6,008 |  |  | $ | 5,152 |
Stock based compensation |  |  | 3,902 |  |  | $ | 3,776 |
Tax loss carryforwards |  |  | 24,418 |  |  |  | 9,890 |
Other |  |  | 374 |  |  |  | 585 |
Long-term deferred tax assets |  |  | 34,702 |  |  |  | 19,403 |
Valuation allowance |  |  | (34,702 | ) |  |  | (1,140 | )
Net long-term deferred tax assets |  | $ | — |  |  | $ | 18,263 |
Pursuant to ASC 740, we must consider all positive and negative evidence regarding the realization of deferred tax assets. ASC 740 provides for four possible sources of taxable income to realize deferred tax assets: 1) taxable income in prior carryback years, 2) reversals of existing deferred tax liabilities, 3) tax planning strategies and 4) projected future taxable income. As of September 30, 2015, we have no available taxable income in prior carryback years, limited reversals of existing deferred tax liabilities or prudent and feasible tax planning strategies. Therefore, the recoverability of our deferred tax assets is dependent upon generating future taxable income. Since the fourth quarter of 2008, the Company has maintained a full valuation allowance against its deferred tax assets, having determined it was more likely than not that the deferred tax assets would not be realized. The determination of releasing valuation allowances against deferred tax assets is made, in part, pursuant to our assessment as to whether it is more likely than not that we will generate sufficient future taxable income against which benefits of the deferred tax assets may or may not be realized. Significant judgment is required in making estimates regarding our ability to generate income in future periods. In the fourth quarter of 2015, we reached the conclusion that it was appropriate to release our valuation allowance against the majority of our deferred tax assets due to the sustained positive operating performance of our operations throughout the entire fiscal year and the projection of future taxable income. Additionally, we maintained a cumulative three year income position throughout fiscal year 2015, reached six consecutive quarters of positive pre-tax operating earnings, and experienced a continued recovery in industry and general economic conditions, all of which were positive factors that overcame prior negative evidence. We also considered forecasts of future operating results and utilization of net operating losses and tax credits prior to their expiration. As a result, we recorded a $27.5 million net reversal of substantially all of our deferred tax asset valuation allowance in the fourth quarter of 2015 after determining it was more likely than not that certain deferred tax assets would be realized. The total valuation allowance as of September 30, 2014 was $37.5 million. As of September 30, 2015, we had federal net operating loss (NOL) carryforwards for federal income tax purposes of $31.7 million that will begin to expire in 2031 which excludes benefits for share based payments of $14.6 million. State NOL carryforwards for state income tax purposes will expire at various dates through 2032. Under ASC 740, the impact of uncertain tax positions taken or expected to be taken on an income tax return must be recognized in the financial statements at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. As of September 30, 2014 and 2015, we had approximately $234,000 and $244,000, respectively, of gross unrecognized tax benefits, of which approximately $154,000 and $154,000, respectively, if recognized, would impact the effective tax rate before considering a change in valuation allowance. The reconciliation of the total amount recorded for unrecognized tax benefits at the beginning and end of the fiscal years ended September 30, 2014 and 2015 is as follows:
|  | 2014 |  |  | 2015 |
|  | (Amounts in thousands) |
Unrecognized tax benefits at the beginning of the year |  | $ | 224 |  |  | $ | 234 |
Increases in tax positions for prior years |  |  | 10 |  |  |  | 10 |
Unrecognized tax benefits as of September 30, |  | $ | 234 |  |  | $ | 244 |
Consistent with our prior practices, we recognize interest and penalties related to uncertain tax positions as a component of income tax expense. As of September 30, 2014 and 2015, interest and penalties represented approximately $110,000 and $120,000, respectively, of the gross unrecognized tax benefits. We are subject to tax by both federal and state taxing authorities. Until the respective statutes of limitations expire, we are subject to income tax audits in the jurisdictions in which we operate. We are no longer subject to U.S. federal tax assessments for fiscal years prior to 2011, and we are not subject to assessments prior to the 2010 fiscal year for the majority of the state jurisdictions. We do not expect a change to the total amount of unrecognized tax benefits in the next 12 months based on examinations by tax authorities, the expiration of statutes of limitations, or potential settlements of outstanding positions.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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