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Income Taxes
 12 Months Ended
Apr. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Effective August 1, 2019, the Company elected to revoke the indefinite reinvestment of foreign unremitted earnings position set forth by ASC 740-30-25-17 for multiple foreign subsidiaries. As a result of this election, the Company recorded a tax withholding expense imposed by the India Income Tax Department of $371,000 and $406,000 for the years ended April 30, 2024 and 2023, respectively.
The Company's accounting policy with respect to the Global Intangible Low-Taxed Income ("GILTI") tax rules is that GILTI will be treated as a periodic charge in the year in which it arises.
Income tax (benefit) expense consisted of the following:
$ in thousands20242023
Current tax (benefit) expense:
Federal$2,332 $691 
State and local65 197 
Foreign2,661 1,736 
Total current tax expense5,058 2,624 
Deferred tax (benefit) expense:
Federal(10,378)— 
State and local(893)— 
Foreign275 515 
Total deferred tax (benefit) expense
(10,996)515 
Net income tax (benefit) expense
$(5,938)$3,139 
The reasons for the differences between the above net income tax (benefit) expense and the amounts computed by applying the statutory federal income tax rate to earnings before income taxes are as follows:
$ in thousands20242023
Income tax expense at statutory rate
$2,755 $945 
State and local taxes, net of federal income tax benefit 575 (119)
Tax credits
(355)(433)
Effects of differing US and foreign tax rates243 260 
Effect of pension settlement
(3,870)— 
Return to provision adjustment743 413 
Impact of foreign subsidiary income to parent96 99 
Increase (decrease) in valuation allowance
(6,579)1,667 
Deferred taxes on unremitted earnings
371 406 
Other items, net83 (99)
Net income tax (benefit) expense
$(5,938)$3,139 
Significant items comprising deferred tax assets and liabilities as of April 30 were as follows:
$ in thousands20242023
Deferred tax assets:
Accrued employee benefit expenses$152 $153 
Allowance for credit losses
151 114 
Deferred compensation950 1,156 
Tax credits (state, net of federal benefits)170 170 
Foreign tax credit carryforwards638 638 
Section 174 R&E Addback2,303 1,558 
Unrecognized actuarial loss, defined benefit plans— 1,064 
Inventory reserves and capitalized costs296 201 
Net operating loss carryforwards152 249 
Proceeds on Sale Leaseback6,316 6,963 
Operating lease liabilities1,211 1,558 
Other332 254 
Total deferred tax assets12,671 14,078 
Deferred tax liabilities:
Book basis in excess of tax basis of property, plant and equipment(1,678)(1,417)
Book basis in excess of tax basis of Sale Leaseback property(1,028)(1,106)
Prepaid pension— (919)
APB 23 Assertion(1,572)(1,318)
Right of use assets(1,142)(1,526)
Debt Issuance Cost on Sale Leaseback(142)(167)
Total deferred tax liabilities(5,562)(6,453)
Valuation allowance(926)(8,568)
Net deferred tax liabilities$6,183 $(943)
Deferred tax assets (liabilities) classified in the balance sheet:
Deferred tax assets, non-current
$7,401 $— 
Deferred tax liabilities, non-current
(1,218)(943)
Net deferred tax assets (liabilities)
$6,183 $(943)
The Company is required to evaluate the realization of the deferred tax asset and any requirement for a valuation allowance in accordance with ASC 740-10-30-2(b). This guidance provides that the future realization of the tax benefit of an existing
deductible temporary difference or carryforward ultimately depends on sufficient taxable income of the appropriate character within the carryback or carryforward period available under the tax law. The Company evaluates all available evidence, both positive and negative, to determine the amount of any required valuation allowance. As of April 30, 2024, our deferred tax assets primarily related to proceeds on a prior sale leaseback and Section 174 research and expenditures addbacks. A valuation allowance of $926,000 and $8,568,000 was recorded against our net deferred tax asset balance as of April 30, 2024 and 2023, respectively. For the year ended April 30, 2024, we recorded a net decrease in valuation allowance of $6,579,000, as compared to a net increase of $1,667,000 for the year ended April 30, 2023, based on management's reassessment of the amount of its deferred tax assets that are more likely than not to be realized.
The Company files federal, state and local tax returns with statutes of limitation generally ranging from 3 to 4 years. The Company is generally no longer subject to federal tax examinations for years prior to fiscal year 2020 or state and local tax examinations for years prior to fiscal year 2019. Tax returns filed by the Company's significant foreign subsidiaries are generally subject to statutes of limitations of 3 to 7 years and are generally no longer subject to examination for years prior to fiscal year 2018. The Company has no unrecognized tax benefits.