Note

. Income Taxes

Earnings before income taxes are as follows:

	Year Ended March 31,
	2019			2018			2017
Domestic	$	12,133		$	12,708		$	12,913
Foreign		(3,510	)		(12,407	)		1,383
Total earnings before income taxes	$	8,623		$	301		$	14,296

The components of our provision for income taxes are as follows:

	Year Ended March 31,
	2019			2018			2017
Current tax provision
U.S. Federal	$	1,831		$	3,732		$	2,282
U.S. State		449			715			510
Foreign		1,166			1,299			849
Total current tax expense		3,446			5,746			3,641
Deferred tax provision:
U.S. Federal		(741	)		(1,589	)		(126	)
U.S. State		(106	)		(216	)		(32	)
Foreign		(1,460	)		(678	)		(370	)
Total deferred tax expense		(2,307	)		(2,483	)		(528	)
Total income tax expense	$	1,139		$	3,263		$	3,113

The components of net deferred tax assets and liabilities are as follows:

	March 31, 2019			March 31, 2018
Current deferred tax assets:
Accrued employee-related expenses	$	163		$	277
Allowances and reserves		100			101
Stock compensation deductible differences		1,061			779
Inventories		1,534			1,388
Currency translation adjustment		(33	)		51
Net operating loss		47			90
Foreign tax credit		16			100
Other		807			--
Total current deferred tax assets		3,695			2,786
Long-term deferred tax liabilities:
Property, plant and equipment		(1,118	)		(1,236	)
Goodwill and intangible assets		(2,249	)		(3,940	)
Other		(6	)		(4	)
Total long-term deferred tax liabilities		(3,373	)		(5,180	)
Valuation allowance		(76	)		(100	)
Net deferred tax liability	$	246		$	(2,494	)

A reconciliation of our income tax provision and the amounts computed by applying statutory rates to income before income taxes is as follows:

	Year Ended March 31,
	2019			2018			2017
Federal income taxes at statutory rates	$	1,811		$	93		$	4,861
State income taxes, net of federal benefit		208			328			302
Tax benefit of stock option exercises		(2,034	)		(1,087	)		(1,576	)
Section 199 manufacturing deduction		--			(381	)		(304	)
Research and development credit		(158	)		(162	)		(385	)
Tax Cuts and Jobs Act		--			(59	)		--
Impairment of non-deductible goodwill		284			4,257			--
Limitation for 162 (m)		766			--			--
Other		262			274			215
Total income tax expense	$	1,139		$	3,263		$	3,113

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

percent to

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).

We have completed our analysis of the TCJA’s income tax effects. In total, the TCJA resulted in a net tax expense of

$43.

The final effect of the TCJA’s

one

-time transition tax was a tax liability of

$322.

During the year ended

March 31, 2018,

we re-measured the applicable deferred tax assets and liabilities based on the rates at which they are expected to reverse. The amount recorded related to the re-measurement of our deferred tax balance was a benefit of

$279.

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

2015,

state tax returns after

2014

and foreign tax returns after

2014

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, 2019,

the gross amount of unrecognized tax benefits was

$1,361.

There would have been

material impact on our effective tax rate for the year ended

March 31, 2019

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

$40,

$24

and

$17

as of

March 31, 2019,

2018

and

2017,

respectively.

A reconciliation of the changes in the gross balance of unrecognized tax benefit amounts is as follows:

	Year Ended March 31,
	2019		2018		2017
Beginning balance	$	827	$	331	$	221
Increases related to current period tax positions		534		496		110
Ending balance	$	1,361	$	827	$	331

We expect that the amount of unrecognized tax benefits will change in the next

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

months.

As of

March 31, 2019,

undistributed earnings of our foreign subsidiaries amounted to

$5,414.

Those earnings are considered indefinitely reinvested and, accordingly,

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, 2019,

we had

$90

of net operating losses for foreign tax purposes. The foreign net operating losses do

not

expire. In addition, we had

$16

of foreign tax credit carryovers which will expire in the tax year

2029.