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Note 12 - Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2025
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 12. Income Taxes Provision for Income Taxes Earnings (loss) before income taxes were as follows:
|  | Year Ended March 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Domestic |  | $ | 12,615 |  |  | $ | (233,853 | ) |  | $ | 1,887 |
Foreign |  |  | (6,654 | ) |  |  | (41,795 | ) |  |  | (2,276 | )
Total earnings (loss) before income taxes |  | $ | 5,961 |  |  | $ | (275,648 | ) |  | $ | (389 | )
The components of our provision for income taxes were as follows:
|  | Year Ended March 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Current tax provision: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  | $ | 3,994 |  |  | $ | 3,002 |  |  | $ | 593 |
U.S. State |  |  | 1,212 |  |  |  | 1,678 |  |  |  | 538 |
Foreign |  |  | 2,790 |  |  |  | 2,330 |  |  |  | 1,070 |
Total current tax expense |  |  | 7,996 |  |  |  | 7,010 |  |  |  | 2,201 |
Deferred tax provision: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  |  | 63 |  |  |  | (20,387 | ) |  |  | (1,432 | )
U.S. State |  |  | 13 |  |  |  | (1,853 | ) |  |  | (210 | )
Foreign |  |  | (137 | ) |  |  | (6,172 | ) |  |  | (1,878 | )
Total deferred tax (benefit) |  |  | (61 | ) |  |  | (28,412 | ) |  |  | (3,520 | )
Total income tax expense (benefit) |  | $ | 7,935 |  |  | $ | (21,402 | ) |  | $ | (1,319 | )
A reconciliation of our income tax provision and the amounts computed by applying statutory rates to earnings (loss) before income taxes was as follows (percentages may not perfectly sum due to rounding):
|  | Year Ended March 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
|  | Amount |  |  |  | % |  | Amount |  |  |  | % |  | Amount |  |  |  | %
Earnings (loss) before income taxes |  | $ | 5,961 |  |  |  |  |  |  | $ | (275,648 | ) |  |  |  |  |  | $ | (389 | ) |  |  |  |
Federal income taxes at statutory rates |  |  | 1,251 |  |  |  | 21.0 | % |  |  | (57,886 | ) |  |  | 21.0 | % |  |  | (82 | ) |  |  | 21.0 | %
State income taxes, net of federal benefit |  |  | 317 |  |  |  | 5.3 | % |  |  | (2,508 | ) |  |  | 0.9 | % |  |  | (1,075 | ) |  |  | 276.3 | %
Compensation adjustments |  |  | 2,283 |  |  |  | 38.3 | % |  |  | 2,738 |  |  |  | (1.0 | %) |  |  | 1,506 |  |  |  | (387.1 | %)
Research and development credit |  |  | (1,054 | ) |  |  | (17.7 | %) |  |  | (1,093 | ) |  |  | 0.4 | % |  |  | (1,010 | ) |  |  | 259.6 | %
Return to provision adjustment |  |  | 516 |  |  |  | 8.7 | % |  |  | (182 | ) |  |  | 0.1 | % |  |  | (125 | ) |  |  | 32.1 | %
Subpart F, GILTI, & FDII |  |  | (484 | ) |  |  | (8.1 | %) |  |  | (412 | ) |  |  | 0.1 | % |  |  | (127 | ) |  |  | 32.6 | %
Foreign rate differential |  |  | 2,047 |  |  |  | 34.3 | % |  |  | (566 | ) |  |  | 0.2 | % |  |  | (313 | ) |  |  | 80.5 | %
Permanent difference |  |  | 47 |  |  |  | 0.8 | % |  |  | 479 |  |  |  | (0.2 | %) |  |  | 33 |  |  |  | (8.5 | %)
Goodwill impairment |  |  | - |  |  |  | - | % |  |  | 32,594 |  |  |  | (11.8 | %) |  |  | - |  |  |  | - | %
Valuation allowance |  |  | 3,019 |  |  |  | 50.6 | % |  |  | 5,398 |  |  |  | (2.0 | %) |  |  | (126 | ) |  |  | 32.4 | %
Other |  |  | (7 | ) |  |  | (0.1 | %) |  |  | 36 |  |  |  | - | % |  |  | - |  |  |  | - | %
Total income tax expense (benefit) | ( | $ | 7,935 |  |  |  | 133.1 | % |  | $ | (21,402 | ) |  |  | 7.8 | % |  | $ | (1,319 | ) |  |  | 339.1 | %
Effective income tax rate |  |  | 133.12 | % |  |  |  |  |  |  | 7.76 | % |  |  |  |  |  |  | 339.07 | % |  |  |  |
Deferred Tax Assets and Liabilities Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of our deferred tax assets (liabilities) were as follows:
|  | 2025 |  |  | 2024 |
Deferred tax assets: |  |  |  |  |  |  |  |
Capitalized research expenditures |  | $ | 8,148 |  |  | $ | 5,116 |
Credits |  |  | 2,774 |  |  |  | 2,528 |
Allowances and reserves |  |  | 2,687 |  |  |  | 3,033 |
Stock compensation deductible differences |  |  | 1,632 |  |  |  | 1,346 |
Operating lease liabilities |  |  | 1,860 |  |  |  | 2,182 |
Inventories |  |  | 1,153 |  |  |  | 668 |
Net operating loss |  |  | 3,219 |  |  |  | 6,633 |
Other |  |  | 265 |  |  |  | 187 |
Deferred tax assets, gross |  |  | 21,738 |  |  |  | 21,693 |
Valuation allowance |  |  | (8,999 | ) |  |  | (5,975 | )
Deferred tax assets, net |  |  | 12,739 |  |  |  | 15,718 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Operating lease right-of-use assets |  |  | (1,843 | ) |  |  | (2,120 | )
Goodwill and intangible assets |  |  | (26,854 | ) |  |  | (28,694 | )
Property, plant and equipment |  |  | (2,273 | ) |  |  | (2,813 | )
Other |  |  | (579 | ) |  |  | (579 | )
Total deferred tax liabilities |  |  | (31,549 | ) |  |  | (34,206 | )
Deferred tax asset/(liabilities) |  |  | (18,810 | ) |  |  | (18,488 | )
Valuation Allowance In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. In evaluating the need for a valuation allowance, management takes into account various factors, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. Based on this evaluation, we have concluded that a valuation allowance is necessary on our U.S. and certain German operations and we do not expect to fully realize our deferred tax assets as of March 31, 2025. The following table summarizes the changes in our valuation allowance for deferred tax assets:
|  | Year Ended March 31, |
|  | 2025 |  |  | 2024 |
Beginning balance |  | $ | 5,975 |  |  | $ | 582 |
Additions charged to income tax expense and other accounts |  |  | 3,657 |  |  |  | 5,398 |
Deductions from reserves |  |  | (637 | ) |  |  | (5 | )
Cumulative translation adjustment |  |  | 4 |  |  |  | - |
Ending balance |  | $ | 8,999 |  |  | $ | 5,975 |
Net Operating Loss Credit and Carryforwards As of March 31, 2025, we had U.S. and Foreign net operating loss (“NOL”) carryforwards consisting of the following:
|  | March 31, 2025 |  |  | Expiration Date |
Pre-2018 federal NOL carryforwards |  | $ | - |  |  |  | N/A |
Post-2018 federal NOL carryforwards |  |  | - |  |  | Indefinite |
State NOL carryforwards |  |  | 9,094 |  |  | March 31, 2030 |
Foreign NOL carryforwards |  |  | 11,671 |  |  | Indefinite |
As of March 31, 2024, we had U.S. and Foreign NOL carryforwards consisting of the following:
|  | March 31, 2024 |  |  | Expiration Date |
Pre-2018 federal NOL carryforwards |  | $ | - |  |  |  | N/A |
Post-2018 federal NOL carryforwards |  |  | - |  |  | Indefinite |
State NOL carryforwards |  |  | 8,709 |  |  | March 31, 2035 |
Foreign NOL carryforwards |  |  | 22,595 |  |  | Indefinite |
As of March 31, 2025, we had U.S. tax credit carryforwards consisting of the following:
|  | March 31, 2025 |  |  | Expiration Date |
Federal research tax credit carryforwards |  | $ | - |  |  |  | N/A |
State research tax credits carryforwards |  |  | 3,492 |  |  | March 31, 2036 |
Federal foreign tax credit carryforwards |  |  | 15 |  |  | March 31, 2037 |
As of March 31, 2024, we had U.S. tax credit carryforwards consisting of the following:
|  | March 31, 2024 |  |  | Expiration Date |
Federal research tax credit carryforwards |  | $ | - |  |  |  | N/A |
State research tax credits carryforwards |  |  | 3,181 |  |  | March 31, 2036 |
Federal foreign tax credit carryforwards |  |  | 15 |  |  | March 31, 2037 |
Undistributed earnings in foreign subsidiaries For the year ended March 31, 2025, provisions have not been made for income taxes on $59,873 of undistributed earnings that were deemed permanently reinvested in foreign subsidiaries at March 31, 2025. Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, depends on certain circumstances existing if and when remittance occurs. A deferred tax liability will be recognized if and when we no longer plan to permanently reinvest these undistributed earnings. Uncertain Tax Positions Uncertain tax positions, if ever recognized in the financial statements, would be recorded in the consolidated statements of operations as part of the income tax provision. A reconciliation of the beginning and ending amount of unrecognized tax benefits, exclusive of interest and penalties, included in the deferred tax liability on our accompanying Consolidated Balance Sheets is as follows:
|  | Year Ended March 31, |
|  | 2025 |  |  | 2024 |
Beginning balance |  | $ | - |  |  | $ | 92 |
(Decrease) increase related to prior period tax positions |  |  | - |  |  |  | (92 | )
Increases related to current period tax positions |  |  | - |  |  |  | - |
Ending balance |  | $ | - |  |  | $ | - |
As of March 31, 2025, we have not recorded any gross unrecognized tax benefits. We recognize interest and penalties accrued on uncertain income tax positions in other expense and general and administrative expense, respectively. Interest and penalties included in other long-term liabilities on our accompanying Consolidated Balance Sheets were $0 for each of the years ended March 31, 2025, 2024 and 2023. We do not expect a material change in unrecognized tax benefits or interest in the next 12 months. We file income tax returns in the U.S. various states and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world. The following tax years remain subject to examination:
Significant Jurisdictions |  |  | Open Years |
U.S. Federal |  |  | 2021-2023 |
U.S. States |  |  | 2021-2023 |
Foreign |  |  | 2017-2023 |

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