XML 38 R21.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Income Taxes | 12 Months Ended
--- | ---
Sep. 30, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | 14. Income Taxes: Components of income (loss) before income taxes were as follows (in thousands):
|  | YEAR ENDED SEPTEMBER 30, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
United States |  | $ | (50,757 | ) |  | $ | (45,506 | ) |  | $ | (41,700 | )
Foreign |  |  | (3,351 | ) |  |  | (9,827 | ) |  |  | (8,134 | )
|  | $ | (54,108 | ) |  | $ | (55,333 | ) |  | $ | (49,834 | )
The provision (benefit) for income taxes consisted of the following (in thousands):
|  | YEAR ENDED SEPTEMBER 30, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 2,422 |  |  | $ | (13,726 | ) |  | $ | (16,901 | )
Foreign |  |  | 286 |  |  |  | 148 |  |  |  | 647 |
State |  |  | - |  |  |  | 6 |  |  |  | 4 |
|  |  | 2,708 |  |  |  | (13,572 | ) |  |  | (16,250 | )
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | - |  |  |  | 2,881 |  |  |  | 964 |
Foreign |  |  | (25 | ) |  |  | 1,328 |  |  |  | (1,907 | )
|  |  | (25 | ) |  |  | 4,209 |  |  |  | (943 | )
|  | $ | 2,683 |  |  | $ | (9,363 | ) |  | $ | (17,193 | )
Actual income tax expense (benefit) differs from income tax expense computed by applying the U.S. statutory federal tax rate of 35.0% for each of the fiscal years ended September 30, 2017, 2016 and 2015 as follows (in thousands):
|  | YEAR ENDED SEPTEMBER 30, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Benefit for U.S federal income tax at statutory rate |  | $ | (18,940 | ) |  | $ | (19,365 | ) |  | $ | (17,442 | )
Effect of foreign income taxes |  |  | 124 |  |  |  | 630 |  |  |  | 249 |
Research and experimentation tax credit |  |  | (248 | ) |  |  | (686 | ) |  |  | (400 | )
State income taxes, net of federal income tax benefit |  |  | — |  |  |  | 4 |  |  |  | 2 |
Nondeductible expenses |  |  | 164 |  |  |  | 149 |  |  |  | 488 |
Resolution of prior years’ tax matters |  |  | 2 |  |  |  | 2,400 |  |  |  | 96 |
Contingency for uncertainty in income taxes |  |  | — |  |  |  | — |  |  |  | (121 | )
Change in valuation allowance |  |  | 20,087 |  |  |  | 7,715 |  |  |  | — |
Foreign income taxes - tax credits |  |  | 506 |  |  |  | — |  |  |  | — |
Disallowance of stock compensation adjustments in excess of book |  |  | 1,074 |  |  |  | — |  |  |  | — |
Other items |  |  | (86 | ) |  |  | (210 | ) |  |  | (65 | )
|  | $ | 2,683 |  |  | $ | (9,363 | ) |  | $ | (17,193 | )
Effective tax rate |  |  | (5.0 | )% |  |  | (16.9 | )% |  |  | 34.5 | %
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. Significant components of the Company’s net deferred income tax asset were as follows (in thousands):
|  | AS OF SEPTEMBER 30, 2017 |  |  | AS OF SEPTEMBER 30, 2016 |  |  | AS OF SEPTEMBER 30, 2015 |
|  | U.S. |  |  | Non U.S. |  |  | Total |  |  | U.S. |  |  | Non U.S. |  |  | Total |  |  | U.S. |  |  | Non U.S. |  |  | Total |
Deferred income tax assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 777 |  |  | $ | 7 |  |  | $ | 784 |  |  | $ | 715 |  |  | $ | 51 |  |  | $ | 766 |  |  | $ | 681 |  |  | $ | 21 |  |  | $ | 702 |
Inventories |  |  | 11,215 |  |  |  | 50 |  |  |  | 11,265 |  |  |  | 5,089 |  |  |  | 21 |  |  |  | 5,110 |  |  |  | 4,350 |  |  |  | (34 | ) |  |  | 4,316 |
Net operating loss carry-forwards, tax credits and deferrals |  |  | 11,803 |  |  |  | 4,490 |  |  |  | 16,293 |  |  |  | 3,000 |  |  |  | 3,823 |  |  |  | 6,823 |  |  |  | - |  |  |  | 2,270 |  |  |  | 2,270 |
Stock-based compensation |  |  | 2,147 |  |  |  | — |  |  |  | 2,147 |  |  |  | 1,905 |  |  |  | — |  |  |  | 1,905 |  |  |  | 1,690 |  |  |  | — |  |  |  | 1,690 |
Accrued product warranty |  |  | 174 |  |  |  | 2 |  |  |  | 176 |  |  |  | 130 |  |  |  | 4 |  |  |  | 134 |  |  |  | 803 |  |  |  | 6 |  |  |  | 809 |
Accrued compensated absences |  |  | 419 |  |  |  | — |  |  |  | 419 |  |  |  | 467 |  |  |  | — |  |  |  | 467 |  |  |  | 520 |  |  |  | — |  |  |  | 520 |
Property and equipment |  |  | — |  |  |  | 430 |  |  |  | 430 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 101 |  |  |  | — |  |  |  | 101 |
Insurance and other reserves |  |  | 127 |  |  |  | 7 |  |  |  | 134 |  |  |  | 170 |  |  |  | — |  |  |  | 170 |  |  |  | 62 |  |  |  | 43 |  |  |  | 105 |
|  |  | 26,662 |  |  |  | 4,986 |  |  |  | 31,648 |  |  |  | 11,476 |  |  |  | 3,899 |  |  |  | 15,375 |  |  |  | 8,207 |  |  |  | 2,306 |  |  |  | 10,513 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  |  | — |  |  |  | (9 | ) |  |  | (9 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 31 |  |  |  | — |  |  |  | 31 |
Property, plant and equipment and other |  |  | (3,087 | ) |  |  | (71 | ) |  |  | (3,158 | ) |  |  | (7,470 | ) |  |  | (11 | ) |  |  | (7,481 | ) |  |  | (5,264 | ) |  |  | (770 | ) |  |  | (6,034 | )
Subtotal deferred income tax assets |  |  | 23,575 |  |  |  | 4,906 |  |  |  | 28,481 |  |  |  | 4,006 |  |  |  | 3,888 |  |  |  | 7,894 |  |  |  | 2,974 |  |  |  | 1,536 |  |  |  | 4,510 |
Valuation allowance |  |  | (23,575 | ) |  |  | (4,684 | ) |  |  | (28,259 | ) |  |  | (4,006 | ) |  |  | (3,709 | ) |  |  | (7,715 | ) |  |  | - |  |  |  | - |  |  |  | - |
Net deferred income tax assets |  | $ | — |  |  | $ | 222 |  |  | $ | 222 |  |  | $ | — |  |  | $ | 179 |  |  | $ | 179 |  |  | $ | 2,974 |  |  | $ | 1,536 |  |  | $ | 4,510 |
Deferred income tax assets and liabilities are reported as follows in the accompanying consolidated balance sheets (in thousands):
|  | AS OF SEPTEMBER 30, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Deferred income tax assets, net |  | $ | 259 |  |  | $ | 216 |  |  | $ | 4,554 |
Deferred income tax liabilities, net |  |  | (37 | ) |  |  | (37 | ) |  |  | (44 | )
|  | $ | 222 |  |  | $ | 179 |  |  | $ | 4,510 |
The financial reporting basis of investments in foreign subsidiaries exceed their tax basis. A deferred tax liability is not recorded for this temporary difference because the investment is deemed to be permanent. A reversal of the Company’s plans to permanently invest in these foreign operations would cause the excess to become taxable. At September 30, 2017, the Company had $7.6 million of cash and cash equivalents held by its foreign subsidiaries. At September 30, 2017, 2016 and 2015, the temporary difference related to undistributed earnings for which no deferred taxes have been provided was approximately $12.8 million, $13.0 million and $14.4 million, respectively. Tax return filings which are subject to review by local tax authorities by major jurisdiction are as follows:
| • | United States—fiscal years ended September 30, 2015 through 2017
| • | State of Texas—fiscal years ended September 30, 2014 through 2017
| • | State of New York—fiscal years ended September 30, 2015 through 2017
| • | State of California – fiscal years ended September 30, 2014 through 2017
| • | State of Pennsylvania – fiscal years ended September 30, 2015 through 2017
| • | Russian Federation—calendar years 2015 through 2017
| • | Canada—fiscal years ended September 30, 2014 through 2017
| • | United Kingdom—fiscal years ended September 30, 2016 through 2017
| • | Colombia—calendar years 2015 through 2017
The following table is a reconciliation of the total amounts of unrecognized tax liabilities (in thousands):
Balance at October 1, 2014 |  | $ | 301 |
Change in prior year tax positions |  |  | (187 | )
Current tax positions |  |  | 17 |
Settlements with taxing authorities |  |  | — |
Lapse of statute of limitations |  |  | (56 | )
Balance at September 30, 2015 |  |  | 75 |
Change in prior year tax positions |  |  | (70 | )
Current tax positions |  |  | — |
Settlements with taxing authorities |  |  | — |
Lapse of statute of limitations |  |  | (4 | )
Balance at September 30, 2016 |  |  | 1 |
Change in prior year tax positions |  |  | (1 | )
Current tax positions |  |  | — |
Settlements with taxing authorities |  |  | — |
Lapse of statute of limitations |  |  | — |
Balance at September 30, 2017 |  | $ | — |
As of September 30, 2017, the Company had net operating loss (“NOL”) carry-forwards of approximately $24.1 million in the United States, $18.6 million in Canada, $0.9 million in Russia and $0.1 million in the United Kingdom to offset future taxable income in those jurisdictions. The NOL carry-forwards for the United States, Canada and Russia begin to expire in 2037, 2033 and 2026, respectively. The NOL carry-forwards for the United Kingdom currently have no expiration. During the year ended September 30, 2016, management concluded that it was more-likely-than-not that all of our U.S. and Canadian net deferred tax assets will not be realized in accordance with U.S. GAAP. At September 30, 2017 and September 30, 2016, we had a valuation allowance against our U.S. net deferred tax assets of $23.6 million and $4.0 million, respectively, and a valuation allowance against our Canadian net deferred tax assets of $4.7 million and $3.7 million, respectively.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration