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Income Taxes (Tables) | 12 Months Ended
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Mar. 31, 2020
Income Taxes [Abstract] |
Income Tax Expense | The income tax expense is as follows:
|  | Years Ended March 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Current tax expense |  |  |  |  |  |  |  |  |
Federal |  | $ | 5,313,000 |  |  | $ | 680,000 |  |  | $ | 12,187,000 |
State |  |  | 1,454,000 |  |  |  | 647,000 |  |  |  | 1,425,000 |
Foreign |  |  | 1,566,000 |  |  |  | 1,723,000 |  |  |  | 1,194,000 |
Total current tax expense |  |  | 8,333,000 |  |  |  | 3,050,000 |  |  |  | 14,806,000 |
Deferred tax (benefit) expense |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (4,516,000 | ) |  |  | (2,087,000 | ) |  |  | 949,000 |
State |  |  | (1,567,000 | ) |  |  | (295,000 | ) |  |  | 393,000 |
Foreign |  |  | (3,261,000 | ) |  |  | (400,000 | ) |  |  | (23,000 | )
Total deferred tax (benefit) expense |  |  | (9,344,000 | ) |  |  | (2,782,000 | ) |  |  | 1,319,000 |
Total income tax (benefit) expense |  | $ | (1,011,000 | ) |  | $ | 268,000 |  |  | $ | 16,125,000 |
Deferred Income Taxes | Deferred income taxes consist of the following:
|  | March 31, 2020 |  |  | March 31, 2019 |
Assets |  |  |  |  |  |
Allowance for bad debts |  | $ | 1,037,000 |  |  | $ | 1,005,000 |
Customer allowances earned |  |  | 3,549,000 |  |  |  | 3,177,000 |
Allowance for stock adjustment returns |  |  | 1,743,000 |  |  |  | 2,073,000 |
Inventory adjustments |  |  | 5,567,000 |  |  |  | 3,701,000 |
Stock options |  |  | 2,427,000 |  |  |  | 2,221,000 |
Operating lease liabilities (1) |  |  | 19,396,000 |  |  |  | - |
Estimate for returns |  |  | 10,839,000 |  |  |  | 2,107,000 |
Accrued compensation |  |  | 1,964,000 |  |  |  | 1,578,000 |
Net operating losses |  |  | 4,091,000 |  |  |  | 2,088,000 |
Tax credits |  |  | 1,343,000 |  |  |  | 1,495,000 |
Other |  |  | 1,620,000 |  |  |  | 5,776,000 |
Total deferred tax assets |  | $ | 53,576,000 |  |  | $ | 25,221,000 |
Liabilities |  |  |  |  |  |  |  |
Plant and equipment, net |  |  | (5,175,000 | ) |  |  | (3,316,000 | )
Intangibles, net |  |  | (4,700,000 | ) |  |  | (5,390,000 | )
Operating lease (1) |  |  | (15,371,000 | ) |  |  | - |
Other |  |  | (3,966,000 | ) |  |  | (3,278,000 | )
Total deferred tax liabilities |  | $ | (29,212,000 | ) |  | $ | (11,984,000 | )
Less valuation allowance |  | $ | (5,493,000 | ) |  | $ | (3,748,000 | )
Total |  | $ | 18,871,000 |  |  | $ | 9,489,000 |
(1) | Adoption of the new lease standard as of April 1, 2019 (see Note 2) resulted in the recognition of a deferred tax asset for operating lease liabilities and a deferred tax liability for operating lease assets. These temporary differences will reverse over the estimated term of the relevant operating leases. As of March 31, 2019, the deferred tax assets associated with operating leases were reported as other deferred tax assets under legacy US GAAP.
Difference Between Income Tax Expense at the Federal Statutory Rate and Effective Tax Rate | The difference between the income tax expense at the federal statutory rate and the Company’s effective tax rate is as follows:
|  | Years Ended March 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Statutory federal income tax rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 31.5 | %
State income tax rate, net of federal benefit |  |  | (3.7 | )% |  |  | (3.7 | )% |  |  | 3.6 | %
Excess tax benefit from stock compensation |  |  | (1.3 | )% |  |  | 0.7 | % |  |  | (0.7 | )%
Foreign income taxed at different rates |  |  | 13.8 | % |  |  | - | % |  |  | (2.6 | )%
Return to provision adjustments |  |  | (1.5 | )% |  |  | - | % |  |  | - | %
Warrants |  |  | - | % |  |  | - | % |  |  | (2.1 | )%
Non-deductible executive compensation |  |  | (4.0 | )% |  |  | (7.3 | )% |  |  | 1.0 | %
Change in valuation allowance |  |  | (18.7 | )% |  |  | (15.3 | )% |  |  | 4.8 | %
Net operating loss carryback |  |  | 4.8 | % |  |  | - | % |  |  | - | %
Effects of mandatory redeemed repatriation |  |  | - | % |  |  | - | % |  |  | 1.5 | %
Effects of U.S. tax rate changes |  |  | - | % |  |  | 0.3 | % |  |  | 8.0 | %
Uncertain tax positions |  |  | 2.1 | % |  |  | 1.8 | % |  |  | 0.6 | %
Research and development credit |  |  | 1.1 | % |  |  | 1.3 | % |  |  | (0.2 | )%
Non-deductible transaction costs |  |  | - | % |  |  | (2.1 | )% |  |  | - | %
Other income tax |  |  | (1.4 | )% |  |  | (0.2 | )% |  |  | 0.2 | %
|  |  | 12.2 | % |  |  | (3.5 | )% |  |  | 45.6 | %
Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | Years Ended March 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Balance at beginning of period |  | $ | 1,083,000 |  |  | $ | 1,219,000 |  |  | $ | 1,092,000 |
Additions based on tax positions related to the current year |  |  | 362,000 |  |  |  | 91,000 |  |  |  | 234,000 |
Reductions for tax positions of prior year |  |  | (434,000 | ) |  |  | (227,000 | ) |  |  | (107,000 | )
Balance at end of period |  | $ | 1,011,000 |  |  | $ | 1,083,000 |  |  | $ | 1,219,000 |

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