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Income Taxes | 12 Months Ended
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Sep. 30, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | 9. Income Taxes Income taxes on the consolidated statements of operations consisted of the following:
|  | Fiscal Year |
(In thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Current provision (benefit): |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  | $ | 263 |  |  | $ | (1,570 | ) |  | $ | 1,355 |
U.S. State |  |  | 108 |  |  |  | 42 |  |  |  | 192 |
International |  |  | 87 |  |  |  | 90 |  |  |  | 41 |
Total current provision (benefit) |  |  | 458 |  |  |  | (1,438 | ) |  |  | 1,588 |
Deferred provision (benefit): |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  |  | 1,851 |  |  |  | (1,336 | ) |  |  | (1,505 | )
U.S. State |  |  | (62 | ) |  |  | 197 |  |  |  | (117 | )
International |  |  | (138 | ) |  |  | — |  |  |  | — |
Total deferred benefit |  |  | 1,651 |  |  |  | (1,139 | ) |  |  | (1,622 | )
Total income tax provision (benefit) |  | $ | 2,109 |  |  | $ | (2,577 | ) |  | $ | (34 | )
The difference between amounts calculated at the statutory U.S. federal income tax rate of 21% and the Company’s effective tax rate was as follows:
|  | Fiscal Year |
(In thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Amount at statutory U.S. federal income tax rate |  | $ | 1,333 |  |  | $ | (305 | ) |  | $ | 1,587 |
Change because of the following items: |  |  |  |  |  |  |  |  |  |  |  |
State income taxes, net of federal benefit |  |  | (273 | ) |  |  | (551 | ) |  |  | (452 | )
U.S. federal and foreign R&D credits |  |  | (920 | ) |  |  | (1,571 | ) |  |  | (2,464 | )
Foreign and state rate differential |  |  | 596 |  |  |  | 212 |  |  |  | 156 |
Valuation allowance change |  |  | 1,059 |  |  |  | 825 |  |  |  | 671 |
Stock-based compensation (1) |  |  | (544 | ) |  |  | (81 | ) |  |  | (163 | )
Contingent consideration expense (gain) and related foreign currency revaluation |  |  | 3 |  |  |  | — |  |  |  | (61 | )
U.S. Federal and state rate change |  |  | (35 | ) |  |  | 17 |  |  |  | 44 |
Tax reserve change |  |  | (150 | ) |  |  | 609 |  |  |  | 770 |
Foreign-derived income deduction |  |  | — |  |  |  | (88 | ) |  |  | (150 | )
Impact of CARES Act |  |  | 735 |  |  |  | (1,700 | ) |  |  | — |
Acquisition-related transaction costs |  |  | 187 |  |  |  | — |  |  |  | — |
Other |  |  | 118 |  |  |  | 56 |  |  |  | 28 |
Income tax provision (benefit) |  | $ | 2,109 |  |  | $ | (2,577 | ) |  | $ | (34 | )
| (1) | Includes non-deductible stock-based compensation.
In March 2020, the CARES Act was enacted and included significant business tax provisions. In particular, the CARES Act modified the rules associated with net operating losses (“NOLs”) and made technical corrections to tax depreciation methods for qualified improvement property. Under the temporary provisions of CARES Act, NOL carryforwards and carrybacks may offset 100% of taxable income for taxable years beginning before 2021. In addition, NOLs arising in 2018, 2019 and 2020 taxable years may be carried back to each of the preceding five years to generate a refund. In fiscal 2020, the income tax benefit included a discrete tax benefit of $1.7 million as a result of our ability under the CARES Act to carry back NOLs incurred to periods when the statutory tax rate was 35% versus our current tax rate of 21%. Excess tax benefits related to stock-based compensation expense are recorded within income tax (provision) benefit on the consolidated statements of operations and totaled $0.9 million, $0.4 million and $0.5 million for fiscal 2021, 2020 and 2019, respectively. The components of deferred income taxes, net, consisted of the following and resulted from differences in the recognition of transactions for income tax and financial reporting purposes:
|  | September 30, |
(In thousands) |  | 2021 |  |  | 2020 |
Depreciable assets |  | $ | (5,106 | ) |  | $ | (1,964 | )
Deferred revenue |  |  | 2,130 |  |  |  | 2,029 |
Accruals and reserves |  |  | 1,572 |  |  |  | 1,858 |
Stock-based compensation |  |  | 1,997 |  |  |  | 2,232 |
Impaired strategic investments |  |  | 1,782 |  |  |  | 1,767 |
NOL carryforwards |  |  | 4,319 |  |  |  | 3,526 |
U.S. Federal and state R&D credits |  |  | 3,066 |  |  |  | 3,216 |
Other |  |  | 618 |  |  |  | 897 |
Valuation allowance |  |  | (7,253 | ) |  |  | (6,246 | )
Deferred taxes, net |  | $ | 3,125 |  |  | $ | 7,315 |
As of September 30, 2021 and 2020, deferred tax asset valuation allowances totaled $7.3 million and $6.2 million, respectively. The valuation allowances were primarily related to other-than-temporary impairment losses on strategic investments, state R&D credit carryforwards, and NOL carryforwards of Creagh Medical. As of September 30, 2021, the Company had federal and state R&D credit carryforwards of $3.1 million that will begin expiring in fiscal 2029. As of September 30, 2021, the Company had U.S. federal and state NOL carryforwards of $0.1 million and $0.1 million tax-effected, respectively, that will begin expiring in fiscal 2035 and fiscal 2029, respectively. Ireland NOL carryforward tax assets totaled $4.1 million as of September 30, 2021, much of which was acquired as part of the Creagh Medical acquisition in fiscal 2016 and the Vetex acquisition in fiscal 2021, and have an unlimited carryforward period. Unrecognized tax benefits are the differences between a tax position taken, or expected to be taken in a tax return, and the benefit recognized for accounting purposes pursuant to accounting guidance. The following is a reconciliation of the changes in unrecognized tax benefits, excluding interest and penalties:
|  | Fiscal Year |
(In thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Unrecognized tax benefits, beginning balance |  | $ | 2,871 |  |  | $ | 2,323 |  |  | $ | 1,559 |
Increases in tax positions for prior years |  |  | 15 |  |  |  | 58 |  |  |  | 278 |
Decreases in tax positions for prior years |  |  | (8 | ) |  |  | (1 | ) |  |  | (2 | )
Increases in tax positions for current year |  |  | 458 |  |  |  | 664 |  |  |  | 735 |
Settlements with taxing authorities |  |  | — |  |  |  | — |  |  |  | — |
Lapse of the statute of limitations |  |  | (449 | ) |  |  | (173 | ) |  |  | (247 | )
Unrecognized tax benefits, ending balance |  | $ | 2,887 |  |  | $ | 2,871 |  |  | $ | 2,323 |
The total amount of unrecognized tax benefits excluding interest and penalties that, if recognized, would affect the effective tax rate was $2.7 million, $2.7 million and $2.1 million as of September 30, 2021, 2020 and 2019, respectively. Currently, the Company does not expect the liability for unrecognized tax benefits to change significantly in the next 12 months and has classified the above balances on the consolidated balance sheets in other noncurrent liabilities. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense. As of September 30, 2021, 2020 and 2019, the gross amount accrued for interest and penalties on unrecognized tax benefits was $0.4 million, $0.6 million and $0.5 million, respectively. The Company files income tax returns, including returns for its subsidiaries, in the U.S. federal jurisdiction and in various state jurisdictions, as well as several non-U.S. jurisdictions. Uncertain tax positions are related to tax years that remain subject to examination. U.S. federal income tax returns for years prior to fiscal 2018 are no longer subject to examination by federal tax authorities. For tax returns for U.S. state and local jurisdictions, the Company is no longer subject to examination for tax years generally before fiscal 2010. For tax returns for non-U.S. jurisdictions, the Company is no longer subject to income tax examination for years prior to 2017. Additionally, the Company has been indemnified of liability for any taxes relating to Creagh Medical, NorMedix and Vetex for periods prior to the respective acquisition dates, pursuant to the terms of the related share purchase agreements. As of September 30, 2021 and 2020, there were no undistributed earnings in foreign subsidiaries.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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