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Income Taxes (Tables)

12 Months Ended

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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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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