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Income Taxes | 12 Months Ended
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Mar. 31, 2016
Income Taxes [Abstract] |
Income Taxes | 17. Income Taxes The income tax expense from the Company’s continuing operations is as follows:
|  | Years Ended March 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Current tax expense |  |  |  |  |  |  |  |  |
Federal |  | $ | 12,400,000 |  |  | $ | 1,523,000 |  |  | $ | 4,564,000 |
State |  |  | 1,995,000 |  |  |  | 1,100,000 |  |  |  | 614,000 |
Foreign |  |  | 803,000 |  |  |  | 527,000 |  |  |  | 599,000 |
Total current tax expense |  |  | 15,198,000 |  |  |  | 3,150,000 |  |  |  | 5,777,000 |
Deferred tax (benefit) expense |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (2,929,000 | ) |  |  | 5,553,000 |  |  |  | 2,477,000 |
State |  |  | (757,000 | ) |  |  | 93,000 |  |  |  | (162,000 | )
Foreign |  |  | (33,000 | ) |  |  | 272,000 |  |  |  | (759,000 | )
Total deferred tax (benefit) expense |  |  | (3,719,000 | ) |  |  | 5,918,000 |  |  |  | 1,556,000 |
Total income tax expense |  | $ | 11,479,000 |  |  | $ | 9,068,000 |  |  | $ | 7,333,000 |
Deferred income taxes consist of the following at March 31:
|  | 2016 |  |  | 2015 |
Assets |  |  |  |  |  |
Accounts receivable valuation |  | $ | 6,438,000 |  |  | $ | 3,100,000 |
Allowance for customer incentives |  |  | 769,000 |  |  |  | 1,296,000 |
Inventory obsolescence reserve |  |  | 1,431,000 |  |  |  | 1,056,000 |
Stock options |  |  | 1,714,000 |  |  |  | 1,931,000 |
Intangibles, net |  |  | 380,000 |  |  |  | 846,000 |
Estimate for returns |  |  | 3,785,000 |  |  |  | 986,000 |
Accrued compensation |  |  | 1,485,000 |  |  |  | 2,563,000 |
Net operating losses |  |  | 2,070,000 |  |  |  | 3,007,000 |
Tax credits |  |  | 1,660,000 |  |  |  | 832,000 |
Other |  |  | 2,583,000 |  |  |  | 2,154,000 |
Total deferred tax assets |  | $ | 22,315,000 |  |  | $ | 17,771,000 |
Liabilities |  |  |  |  |  |  |  |
Property and equipment, net |  |  | (1,119,000 | ) |  |  | (807,000 | )
Other |  |  | (2,124,000 | ) |  |  | (1,635,000 | )
Total deferred tax liabilities |  | $ | (3,243,000 | ) |  | $ | (2,442,000 | )
Less valuation allowance |  | $ | - |  |  | $ | - |
Net deferred tax assets |  | $ | 19,072,000 |  |  | $ | 15,329,000 |
Net current deferred income tax asset |  | $ | 33,347,000 |  |  | $ | 22,998,000 |
Net long-term deferred income tax liability |  |  | (14,315,000 | ) |  |  | (7,803,000 | )
Net current deferred income tax liability |  |  | (196,000 | ) |  |  | (127,000 | )
Net long-term deferred income tax asset |  |  | 236,000 |  |  |  | 261,000 |
Total |  | $ | 19,072,000 |  |  | $ | 15,329,000 |
At March 31, 2016 and 2015, net current deferred income tax liability of $196,000 and $127,000, respectively, are included in other current liabilities in the consolidated balance sheets. At March 31, 2016, the Company had federal and state net operating loss carryforwards of $1,878,000 and $28,703,000, respectively. The utilization of these net operating loss carryforwards may be permanently limited due to Internal Revenue Code Section 382 in the Unites States. Prior to the utilization of such losses, the Company will perform further analysis to determine the amount subject to limitation. Additionally, in certain states the suspension of the usage of the net operating losses may apply. The net operating loss carryforwards expire between fiscal years 2021 and 2033. The U.S. operating loss carryforwards include $1,878,000 of losses attributable to windfall stock option deductions. A net benefit of $712,000 will be recorded to additional paid-in capital when realized as a reduction to income taxes payable. Realization of the Company's deferred tax assets is dependent upon the Company’s ability to generate sufficient taxable income. Management reviews the Company's deferred tax assets on a jurisdiction by jurisdiction basis to determine whether it is more likely than not that the deferred tax assets will be realized. Management believes that it is more likely than not that future taxable income will be sufficient to realize the recorded deferred tax assets. In evaluating this ability, management considers long-term agreements and Remanufactured Core purchase obligations with the Company’s major customers that expire at various dates through April 2021. Management also periodically compares its forecasts to actual results. Even though there can be no assurance that the forecasted results will be achieved, the history of income in all other jurisdictions provides sufficient positive evidence that no valuation allowance is needed. For the years ended March 31, 2016, 2015, and 2014, the primary components of the Company’s income tax expense were (i) the current liability due to federal, state and foreign income taxes, (ii) foreign income taxed at rates that are different from the federal statutory rate, (iii) non-deductible expenses in connection with the fair value adjustments on the warrants, (iv) impact of the non-deductible executive compensation under Internal Revenue Code Section 162(m), and (v) the impact of uncertain tax positions. The difference between the income tax expense at the federal statutory rate and the Company’s effective tax rate from the Company’s continuing operations is as follows:
|  | Years Ended March 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Statutory federal income tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 34.0 | %
State income tax rate, net of federal benefit |  |  | 4.0 | % |  |  | 2.2 | % |  |  | 2.4 | %
Change in deferred tax rate |  |  | - | % |  |  | (0.2 | )% |  |  | (1.8 | )%
Foreign income taxed at different rates |  |  | (0.8 | )% |  |  | (0.9 | )% |  |  | (7.2 | )%
Warrants |  |  | 8.2 | % |  |  | 0.8 | % |  |  | 25.7 | %
Non-deductible executive compensation |  |  | 2.2 | % |  |  | 3.4 | % |  |  | 1.6 | %
Uncertain Tax Positions |  |  | 0.4 | % |  |  | 2.5 | % |  |  | (2.4 | )%
Other income tax |  |  | 3.1 | % |  |  | 1.4 | % |  |  | 0.8 | %
|  |  | 52.1 | % |  |  | 44.2 | % |  |  | 53.1 | %
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions with varying statutes of limitations. At March 31, 2016, the Company is under examination in the U.S. by the Internal Revenue Service (“IRS”) for the years ended March 31, 2011 through 2014. During the year ended March 31, 2016, the Company received various Notices of Proposed Adjustments (“NOPAs”) from the IRS relating to the tax years ended March 31, 2013 and 2014. The NOPAs primarily related to timing differences related to the discontinued operations and bankruptcy of the Fenco Entities (as defined and further discussed in Note 20). The Company’s tax provision for the year ended March 31, 2016 has been adjusted to include the IRS proposed adjustments. The Company believes that adequate amounts of tax and related interest have been provided in income tax expense related to these NOPAs. The Company is also under examination by the State of California for the years ended March 31, 2013 and 2014. The Company is not under examination in any another jurisdiction. The Company believes no significant changes in the unrecognized tax benefits will occur within the next 12 months. A reconciliation of the beginning and ending amount of unrecognized tax benefits from the Company’s continuing operations is as follows:
|  | Years Ended March 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Balance at beginning of period |  | $ | 1,117,000 |  |  | $ | 540,000 |  |  | $ | 827,000 |
Additions based on tax positions related to the current year |  |  | 57,000 |  |  |  | 359,000 |  |  |  | 71,000 |
Additions for tax positions of prior year |  |  | 217,000 |  |  |  | 336,000 |  |  |  | - |
Reductions for tax positions of prior year |  |  | (210,000 | ) |  |  | (118,000 | ) |  |  | (358,000 | )
Settlements |  |  | - |  |  |  | - |  |  |  | - |
Balance at end of period |  | $ | 1,181,000 |  |  | $ | 1,117,000 |  |  | $ | 540,000 |
At March 31, 2016, 2015 and 2014, there are $678,000, $958,000 and $387,000 of unrecognized tax benefits that if recognized would affect the annual effective tax rate. The Company recognizes interest and penalties accrued related to unrecognized tax benefits as part of income tax expense. During the years ended March 31, 2016, 2015, and 2014, the Company recognized approximately $34,000, $(56,000), and $(9,000) in interest and penalties. The Company had approximately $90,000 and $56,000 for the payment of interest and penalties accrued at March 31, 2016 and 2015, respectively.

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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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