XML 32 R19.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Note 11 - Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2018
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 11 . Income Taxes Earnings before income taxes are as follows (in thousands):
|  | Year Ended March 31, |
|  | 201 8 |  |  | 201 7 |  |  | 201 6 |
Domestic |  | $ | 12,708 |  |  | $ | 12,913 |  |  | $ | 14,427 |
Foreign |  |  | (12,407 | ) |  |  | 1,383 |  |  |  | 1,128 |
Total earnings before income taxes |  | $ | 301 |  |  | $ | 14,296 |  |  | $ | 15,555 |
The components of our provision for income taxes are as follows (in thousands):
|  | Year E nded March 31, |
|  | 201 8 |  |  | 201 7 |  |  | 201 6 |
Current tax provision |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 3,732 |  |  | $ | 2,282 |  |  | $ | 3,666 |
State |  |  | 715 |  |  |  | 510 |  |  |  | 627 |
Foreign |  |  | 1,299 |  |  |  | 849 |  |  |  | 658 |
Total current tax expense |  |  | 5,746 |  |  |  | 3,641 |  |  |  | 4,951 |
Deferred tax provision: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (1,589 | ) |  |  | (126 | ) |  |  | (189 | )
State |  |  | (216 | ) |  |  | (32 | ) |  |  | (138 | )
Foreign |  |  | (678 | ) |  |  | (370 | ) |  |  | (238 | )
Total deferred tax expense |  |  | (2,483 | ) |  |  | (528 | ) |  |  | (565 | )
Total income tax expense |  | $ | 3,263 |  |  | $ | 3,113 |  |  | $ | 4,386 |
The components of net deferred tax assets and liabilities are as follows (in thousands):
|  | March 3 1, |
|  | 201 8 |  |  | 201 7 |
Current deferred tax assets: |  |  |  |  |  |  |  |
Accrued employee-related expenses |  | $ | 277 |  |  | $ | 242 |
Allowances and reserves |  |  | 101 |  |  |  | 132 |
Stock compensation deductible differences |  |  | 779 |  |  |  | 898 |
Inventories |  |  | 1,388 |  |  |  | 691 |
Currency translation adjustment |  |  | 51 |  |  |  | -- |
Net operating loss |  |  | 90 |  |  |  | -- |
Foreign tax credit |  |  | 100 |  |  |  | -- |
Other |  |  | -- |  |  |  | 9 |
Total current deferred tax assets |  |  | 2,786 |  |  |  | 1,972 |
Long-term deferred tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | (1,236 | ) |  |  | (1,635 | )
Goodwill and intangible assets |  |  | (3,940 | ) |  |  | (3,807 | )
Currency translation adjustment |  |  | -- |  |  |  | (3 | )
Other |  |  | (4 | ) |  |  | (81 | )
Total long-term deferred tax liabilities |  |  | (5,180 | ) |  |  | (5,526 | )
Valuation allowance |  |  | (100 | ) |  |  | -- |
Net deferred tax liability |  | $ | (2,494 | ) |  | $ | (3,554 | )
A reconciliation of our income tax provision and the amounts computed by applying statutory rates to income before income taxes is as follows (in thousands):
|  | Year E nded March 31, |
|  | 201 8 |  |  | 201 7 |  |  | 201 6 |
Federal income taxes at statutory rates |  | $ | 93 |  |  | $ | 4,861 |  |  | $ | 5,445 |
State income taxes, net of federal benefit |  |  | 328 |  |  |  | 302 |  |  |  | 293 |
Tax benefit of stock option exercises |  |  | (1,087 | ) |  |  | (1,576 | ) |  |  | (751 | )
Section 199 manufacturing deduction |  |  | (381 | ) |  |  | (304 | ) |  |  | (440 | )
Research and development credit |  |  | (162 | ) |  |  | (385 | ) |  |  | (345 | )
Tax Cuts and Jobs Act |  |  | (59 | ) |  |  | -- |  |  |  | -- |
Impairment of non-deductible goodwill |  |  | 4,257 |  |  |  | -- |  |  |  | -- |
Other |  |  | 274 |  |  |  | 215 |  |  |  | 184 |
Total income tax expense |  | $ | 3,263 |  |  | $ | 3,113 |  |  | $ | 4,386 |
On December 22, 2017, the Tax Cuts and Jobs Act ("TCJA") was enacted in the U.S., making significant changes to U.S. tax law. The TCJA reduces the U.S. federal corporate income tax rate from 34 percent to 21 percent, requires companies to pay a one -time transition tax on certain un-remitted earnings of foreign subsidiaries that were previously tax deferred, generally eliminates U.S. federal income tax on dividends from foreign subsidiaries, creates new taxes on certain foreign-sourced earnings, repeals the Section 199 deduction and imposes limitations on executive compensation under Section 162 (m). During the year ended March 31, 2018, we revised our estimated annual effective tax rate to reflect the change in the federal statutory rate. The rate change results in the Company using a blended statutory rate for the annual period of 30.8 percent. Shortly thereafter, the SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the TCJA for which the accounting under ASC 740 is incomplete. To the extent that a company's accounting for certain income tax effects of the TCJA is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before enactment of the TCJA. Accordingly, as of March 31, 2018, we have not completed our accounting for the tax effects of the TCJA. However, we made a reasonable estimate of the one -time transition tax and recognized a provisional tax liability of $220,000. We also re-measured the applicable deferred tax assets and liabilities based on the rates at which they are expected to reverse. However, we are still analyzing certain aspects of the TCJA and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the re-measurement of our deferred tax balance was a benefit of $279,000. Overall, the TCJA resulted in a net tax benefit of $59,000. Such amount was recorded as a tax benefit and is included as a component of income tax expense in the accompanying condensed consolidated statements of operations for the year ending March 31, 2018. We or one of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Our federal tax returns for all years after 2014, state tax returns after 2013 and foreign tax returns after 2013 are subject to future examination by tax authorities for all our tax jurisdictions. Although the outcome of tax audits, if any, is always uncertain, we believe that we have adequately accrued for all amounts of tax, including interest and penalties and any adjustments that may result. As of March 31, 2018, the gross amount of unrecognized tax benefits was $827,000. There would have been no material impact on our effective tax rate for the year ended March 31, 2018 had these benefits been recognized. We recognize interest and penalties related to unrecognized tax benefits in other expense and general and administrative expense, respectively. Accrued interest and penalties related to unrecognized tax benefits were $24,000, $17,000 and $3,000 as of March 31, 2018, 2017 and 2016, respectively. A reconciliation of the changes in the gross balance of unrecognized tax benefit amounts is as follows (in thousands):
|  | Year Ended March 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Beginning balance |  | $ | 331 |  |  | $ | 221 |  |  | $ | -- |
Increases related to current period tax positions |  |  | 496 |  |  |  | 110 |  |  |  | 221 |
Ending balance |  | $ | 827 |  |  | $ | 331 |  |  | $ | 221 |
We expect that the amount of unrecognized tax benefits will change in the next 12 months; however, we do not expect the change to have a significant impact on our consolidated statements of operations or consolidated balance sheets. At this time, we expect resolution of the uncertain tax position within 12 months. As of March 31, 2018, undistributed earnings of our foreign subsidiaries amounted to $3,724,450. Those earnings are considered indefinitely reinvested and, accordingly, no U.S. federal and state income taxes have been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, we would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable because of the complexities associated with its hypothetical calculation; however, unrecognized foreign tax credits would be available to reduce a portion of the U.S. tax liability. As of March 31, 2018, we had $272,000 of net operating losses for foreign tax purposes. The foreign net operating losses do not expire. In addition, we had $100,000 of foreign tax credit carryovers which will expire in the tax year 2028.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration