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Income Taxes
 12 Months Ended
Apr. 30, 2025
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 $416,000 and $371,000 for the years ended April 30, 2025 and 2024, 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 thousands20252024
Current tax (benefit) expense:
Federal$3,043 $2,332 
State and local610 65 
Foreign1,752 2,661 
Total current tax expense5,405 5,058 
Deferred tax (benefit) expense:
Federal(1,433)(10,378)
State and local(650)(893)
Foreign(120)275 
Total deferred tax (benefit) expense
(2,203)(10,996)
Net income tax (benefit) expense
$3,202 $(5,938)
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 thousands20252024
Income tax expense at statutory rate
$3,105 $2,755 
State and local taxes, net of federal income tax benefit (168)575 
Tax credits
(515)(355)
Effects of differing US and foreign tax rates183 243 
Non-deductible transaction costs
348 — 
Effect of pension settlement
— (3,870)
Return to provision adjustment(72)743 
Impact of foreign subsidiary income to parent6 96 
Increase (decrease) in valuation allowance
7 (6,579)
Deferred taxes on unremitted earnings
416 371 
Other items, net(108)83 
Net income tax (benefit) expense
$3,202 $(5,938)
Significant items comprising deferred tax assets and liabilities as of April 30 were as follows:
$ in thousands20252024
Deferred tax assets:
Accrued employee benefit expenses$417 $152 
Allowance for credit losses
151 151 
Deferred compensation1,345 950 
Tax credits (state, net of federal benefits)170 170 
Foreign tax credit carryforwards638 638 
Section 174 R&E
3,269 2,303 
Warranty Accrual
193 — 
Inventory reserves and capitalized costs478 296 
Net operating loss carryforwards147 152 
Proceeds on sale leaseback
6,550 6,316 
Operating lease liabilities2,372 1,211 
Other457 332 
Total deferred tax assets16,187 12,671 
Deferred tax liabilities:
Book basis in excess of tax basis of property, plant and equipment(3,024)(1,678)
Book basis in excess of tax basis of sale leaseback property
(1,095)(1,028)
Book basis in excess of tax basis of intangibles assets
(4,005)— 
APB 23 Assertion(1,507)(1,572)
Right of use assets(2,589)(1,142)
Debt Issuance Cost on sale leaseback
(138)(142)
Total deferred tax liabilities(12,358)(5,562)
Valuation allowance(933)(926)
Net deferred tax liabilities$2,896 $6,183 
Deferred tax assets (liabilities) classified in the balance sheet:
Deferred tax assets, non-current
$3,994 $7,401 
Deferred tax liabilities, non-current
(1,098)(1,218)
Net deferred tax assets (liabilities)
$2,896 $6,183 
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, 2025, our deferred tax assets primarily related to proceeds on a prior sale leaseback, Section 174 research and expenditures addbacks, and operating lease liabilities. A valuation allowance of $933,000 and $926,000 was recorded against our net deferred tax asset balance as of April 30, 2025 and 2024, respectively. For the year ended April 30, 2025, we recorded a net increase in valuation allowance of $7,000, as compared to a net decrease of $6,579,000 for the year ended April 30, 2024, 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 2021 or state and local tax examinations for years prior to fiscal year 2020. 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 2019. The Company has no unrecognized tax benefits.