XML 33 R18.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Income Taxes | 12 Months Ended
--- | ---
Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income (loss) before provision for income taxes are as follows (in thousands):
| Years Ended September 30,
| 2018 |  | 2017 |  | 2016
Domestic | $ | 7,845 |  |  | $ | 1,900 |  |  | $ | 2,100 |
Foreign | (2,320 | ) |  | 7,930 |  |  | (7,550 | )
| $ | 5,525 |  |  | $ | 9,830 |  |  | $ | (5,450 | )
The components of the provision for income taxes are as follows (in thousands):
| Years Ended September 30,
| 2018 |  | 2017 |  | 2016
Current: |  |  |  |  |
Domestic federal | $ | 1,167 |  |  | $ | 54 |  |  | $ | 530 |
Foreign | (1,404 | ) |  | 1,330 |  |  | 500 |
Foreign withholding taxes | 356 |  |  | 240 |  |  | 280 |
Domestic state | 101 |  |  | 120 |  |  | 110 |
Total current | 220 |  |  | 1,744 |  |  | 1,420 |
Deferred: |  |  |  |  |
Domestic federal | — |  |  | — |  |  | 1,680 |
Total deferred | — |  |  | — |  |  | 1,680 |
Total provision | $ | 220 |  |  | $ | 1,744 |  |  | $ | 3,100 |
The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017, and permanently reduces the U.S. federal corporate tax rate from 35% to 21%, eliminated corporate Alternative Minimum Tax, modified rules for expensing capital investment, and limits the deduction of interest expense for certain companies. The Act is a fundamental change to the taxation of multinational companies, including a shift from a system of worldwide taxation with some deferral elements to a territorial system, current taxation of certain foreign income, a minimum tax on low-tax foreign earnings, and new measures to curtail base erosion and promote U.S. production. As a result of the Act, the statutory rate applicable to our fiscal year ending September 30, 2018 was 24.3%, based on a fiscal year blended rate calculation. Accounting Standard Codification (“ASC”) 740 requires filers to record the effect of tax law changes in the period enacted. In the first quarter of fiscal 2018, we re-measured the applicable deferred tax assets based on the rates at which they are expected to reverse. We adjusted our gross deferred tax assets and liabilities and recorded a corresponding offset to our full valuation allowance against our net deferred tax assets, which resulted in minimal net effect to our provision for income taxes and effective tax rate. The Act includes a one-time mandatory repatriation transition tax on certain net accumulated earnings and profits of our foreign subsidiaries. We have analyzed the earnings and profits of our foreign subsidiaries and determined that no transition taxes are due or expected. The other provisions of Tax Reform are either immaterial or not applicable for the year ended September 30, 2018. A reconciliation of actual income taxes to income taxes at the expected United States federal corporate income tax rate is as follows (in thousands, except percentages):
| Years Ended September 30,
| 2018 |  | 2017 |  | 2016
Federal statutory rate | 24.3 | % |  | 34.0 | % |  | 34.0 | %
Tax expense (benefit) at the federal statutory rate | $ | 1,342 |  |  | $ | 3,340 |  |  | $ | (1,890 | )
Effect of permanent book-tax differences | 75 |  |  | 340 |  |  | 1,120 |
State tax provision | 76 |  |  | 100 |  |  | 110 |
Valuation allowance for net deferred tax assets | 617 |  |  | (1,610 | ) |  | 2,690 |
Uncertain tax items | (3,013 | ) |  | 350 |  |  | 350 |
Tax rate differential | 1,107 |  |  | (776 | ) |  | 1,050 |
Other items | 16 |  |  | — |  |  | (330 | )
| $ | 220 |  |  | $ | 1,744 |  |  | $ | 3,100 |
Deferred income taxes reflect the tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred tax assets and deferred tax liabilities are as follows (in thousands):
| Years Ended September 30,
| 2018 |  | 2017
Deferred tax assets (liabilities): |  |  |
Capitalized inventory costs | $ | 193 |  |  | $ | 210 |
Inventory write-downs | 1,333 |  |  | 1,945 |
Accrued warranty | 204 |  |  | 260 |
Deferred profits | 1,006 |  |  | 1,190 |
Accruals and reserves not currently deductible | 5,017 |  |  | 1,945 |
Stock option expense | 738 |  |  | 1,080 |
Book vs. tax basis of acquired assets | — |  |  | (1,290 | )
Federal net operating loss carryforwards | 2,922 |  |  | 4,820 |
Foreign and state net operating losses | 13,860 |  |  | 14,800 |
Book vs. tax depreciation and amortization | (1,667 | ) |  | (2,250 | )
Foreign tax credits | — |  |  | 420 |
Other deferred tax assets | 163 |  |  | — |
Total deferred tax assets | 23,769 |  |  | 23,130 |
Valuation allowance | (23,769 | ) |  | (22,930 | )
Deferred tax assets, net of valuation allowance | $ | — |  |  | $ | 200 |
Changes in the deferred tax valuation allowance are as follows (in thousands):
| Years Ended September 30,
| 2018 |  | 2017
Balance at the beginning of the year | $ | 22,930 |  |  | $ | 24,310 |
Additions (reductions) to valuation allowance | 839 |  |  | (1,380 | )
Balance at the end of the year | $ | 23,769 |  |  | $ | 22,930 |
The deferred tax valuation allowance increased by $0.8 million and decreased by $1.4 million for the years ended September 30, 2018 and 2017, respectively. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future income and tax planning strategies in making this assessment. We have established valuation allowances on substantially all net deferred tax assets, after considering all of the available objective evidence, both positive and negative, historical and prospective, with greater weight given to historical evidence, and determined it is not more likely than not that these assets will be realized. In 2017 and 2018, we reversed a portion of the valuation allowance related to net operating loss carryforwards which we have determined will be utilized against net operating income in the current year. Additionally, as of September 30, 2017, the deferred tax assets related to acquired foreign tax credits and the related valuation allowance were reduced due to our inability to use them prior to expiration. We will continue to monitor our cumulative income and loss positions in the U.S. and foreign jurisdictions to determine whether full valuation allowances on net deferred tax assets are appropriate. As of September 30, 2018, we have federal net operating loss carryforwards of approximately $14.0 million that expire at various times between 2028 and 2035. The utilization of those federal net operating losses are limited to approximately $0.8 million per year. We have foreign net operating loss carryforwards of approximately $53.0 million which expire at various times through 2025. We have approximately $3.6 million of state net operating loss carryforwards. We apply the accounting guidance for uncertainty in income taxes using the provisions of FASB ASC 740. In this regard, an uncertain tax position represents our expected treatment of a tax position taken in a filed tax return or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. Approximately $0.6 million of this total represents the amount that, if recognized, would favorably affect our effective income tax rate in future periods. A reconciliation of the beginning and ending amount of our unrecognized tax benefits is summarized as follows (in thousands):
| Years Ended September 30,
| 2018 |  | 2017 |  | 2016
Balance at beginning of the year | $ | 4,210 |  |  | $ | 3,860 |  |  | $ | 3,510 |
Additions related to tax positions taken in prior years | 155 |  |  | 350 |  |  | 350 |
Reductions due to resolution of uncertain tax position | (3,167 | ) |  | — |  |  | — |
Balance at the end of the year | $ | 1,198 |  |  | $ | 4,210 |  |  | $ | 3,860 |
We have classified all of our liabilities for uncertain tax positions as income taxes payable long-term. Income taxes long-term also includes other items, primarily withholding taxes that are not due until the related intercompany service fees are paid. We report accrued interest and penalties related to unrecognized tax benefits in income tax expense. We recognized a net (benefit) expense for interest and penalties of $(2.0) million, $0.4 million and $0.4 million for 2018, 2017 and 2016, respectively. Income taxes payable long-term on the Consolidated Balance Sheets includes a cumulative accrual for potential interest and penalties of $0.7 million and $2.6 million as of September 30, 2018 and 2017, respectively. We do not expect that the amount of our tax reserves for uncertain tax positions will materially change in the next 12 months other than the continued accrual of interest and penalties. Amtech and one or more of our subsidiaries file income tax returns in the Netherlands, Germany, France, China and other foreign jurisdictions, as well as the U.S. and various states in the U.S. We have not signed any agreements with the Internal Revenue Service, any state or foreign jurisdiction to extend the statute of limitations for any fiscal year. As such, the number of open years is the number of years dictated by statute in each of the respective taxing jurisdictions, but generally is from 3 to 5 years. These open years contain certain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, timing, or inclusion of revenues and expenses, or the sustainability of income tax positions of Amtech and our subsidiaries.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration