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Income Taxes | 12 Months Ended
--- | ---
Sep. 30, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of loss from continuing operations before income tax benefit are as follows:
| Years Ended September 30,
| 2016 |  | 2015
U.S. | $ | (11,506 | ) |  | $ | (6,373 | )
Non-U.S. | (1,827 | ) |  | 348 |
Loss before income tax benefit | $ | (13,333 | ) |  | $ | (6,025 | )
Income taxes from continuing operations before income tax benefit consist of the following:
| Years Ended September 30,
| 2016 |  | 2015
Current income tax provision (benefit): |  |  |
U.S. federal | $ | (2,687 | ) |  | $ | (2,560 | )
U.S. state and local | (111 | ) |  | 55 |
Non-U.S. | 94 |  |  | 338 |
Total current tax benefit | (2,704 | ) |  | (2,167 | )
Deferred income tax provision (benefit): |  |  |
U.S. federal | 1,481 |  |  | (277 | )
U.S. state and local | 69 |  |  | (83 | )
Non-U.S. | (844 | ) |  | 83 |
Total deferred tax provision (benefit) | 706 |  |  | (277 | )
Income tax benefit | $ | (1,998 | ) |  | $ | (2,444 | )
The income tax benefit from continuing operations in the accompanying consolidated statements of operations differs from amounts determined by using the statutory rate as follows:
| Years Ended September 30,
| 2016 |  | 2015
Loss before income tax benefit | $ | (13,333 | ) |  | $ | (6,025 | )
Less-U.S. state and local income tax benefit | (111 | ) |  | (13 | )
Loss before U.S. and non-U.S. federal income tax provision | $ | (13,222 | ) |  | $ | (6,012 | )
Income tax benefit at U.S. federal statutory rates | $ | (4,628 | ) |  | $ | (2,104 | )
Tax effect of: |  |  |
Foreign rate differential | 254 |  |  | 334 |
Permanent items | 8 |  |  | 438 |
Undistributed earnings of non-U.S. subsidiaries | — |  |  | (992 | )
Prior year tax adjustments | (56 | ) |  | (23 | )
State and local income taxes | (80 | ) |  | (113 | )
Impact of tax law changes | (338 | ) |  | — |
Federal tax credits | (572 | ) |  | (92 | )
Valuation allowance | 3,309 |  |  | 147 |
Changes in uncertain tax positions | (37 | ) |  | 58 |
Other | 142 |  |  | (97 | )
Income tax benefit | $ | (1,998 | ) |  | $ | (2,444 | )
Deferred tax assets and liabilities at September 30 consist of the following:
| 2016 |  | 2015
Deferred tax assets: |  |  |
Net non-U.S. operating loss carryforwards | $ | 777 |  |  | $ | 595 |
Employee benefits | 3,366 |  |  | 3,340 |
Inventory reserves | 1,032 |  |  | 865 |
Allowance for doubtful accounts | 234 |  |  | 377 |
Foreign tax credits to undistributed earnings | 870 |  |  | — |
Intangibles | 4,364 |  |  | 1,936 |
Foreign tax credits | 575 |  |  | 517 |
Other | 2,307 |  |  | 1,007 |
Total deferred tax assets | 13,525 |  |  | 8,637 |
Deferred tax liabilities: |  |  |
Depreciation | (10,777 | ) |  | (9,022 | )
Unremitted foreign earnings | (65 | ) |  | (65 | )
Prepaid expenses | (566 | ) |  | (432 | )
Other | (647 | ) |  | (87 | )
Total deferred tax liabilities | (12,055 | ) |  | (9,606 | )
Net deferred tax assets (liabilities) | 1,470 |  |  | (969 | )
Valuation allowance | (4,399 | ) |  | (1,095 | )
Net deferred tax liabilities | $ | (2,929 | ) |  | $ | (2,064 | )
As a result of losses incurred in recent years, the Company’s U.S. jurisdiction entered into a three year cumulative loss position in the fourth quarter of fiscal 2016. A cumulative loss position is considered significant negative evidence in assessing the realizability of a deferred tax asset that is difficult to overcome in determining that a valuation allowance is not needed against deferred tax assets. Positive evidence was also considered, including taxable income available in the carryback period. Based on the weight of available positive and negative evidence, the Company established a valuation allowance of $3,259 in the fourth quarter of fiscal 2016 on its U.S. deferred tax assets. Of this amount, $838 relates to deferred tax assets that existed as of the beginning of the fiscal year. A valuation allowance had already been maintained on certain U.S. federal and state tax credit carryforwards with limited lives, the total U.S. valuation allowance as of September 30, 2016 is $3,902. At September 30, 2016, the Company has a non-U.S. tax loss carryforward of approximately $6,132, which primarily relates to the Company’s Irish and Italian subsidiaries. The Company's Irish subsidiary ceased operations in 2007 and therefore, a valuation allowance has been recorded against the deferred tax asset related to the Irish tax loss carryforward because it is unlikely that such operating loss can be utilized unless the Irish subsidiary resumes operations. The non-U.S. tax loss carryforward does not expire. The Company has $575 of foreign tax credit carryforwards that are subject to expiration in fiscal 2023-2026, $520 of U.S. general business tax credits that are subject to expiration in 2035-2036, and alternative minimum tax of $95 that do not expire. A valuation allowance has been recorded against the deferred tax assets related to the foreign tax credit carryforwards and U.S. general business credits. In addition, the Company has $165 of U.S. state tax credit carryforwards subject to expiration in fiscal 2022-2024 and $10,583 of U.S. state and local tax loss carryforwards subject to expiration in fiscal 2020-2036. The U.S. state tax credit carryforwards have been fully offset by a valuation allowance. A portion of the U.S. state and local tax loss carryforwards presented in the table above have been reduced by unrealized stock compensation deductions of $5. The Company reported liabilities for uncertain tax positions, excluding any related interest and penalties, in fiscal 2016 and 2015 of $69 and $105, respectively. If recognized, $69 of the fiscal 2016 uncertain tax positions would impact the effective tax rate. As of September 30, 2016, the Company had accrued interest of $21 and recognized $3 for interest and penalties in continuing operations. The Company classifies interest and penalties on uncertain tax positions as income tax expense. A summary of activity related to the Company’s uncertain tax position is as follows:
| 2016 |  | 2015
Balance at beginning of year | $ | 105 |  |  | $ | 56 |
Increase due to tax positions taken in current prior year | — |  |  | 49 |
Decrease due to lapse of statute of limitations | (36 | ) |  | — |
Balance at end of year | $ | 69 |  |  | $ | 105 |
The Company is subject to income taxes in the U.S. federal jurisdiction, Ireland, Italy and various states and local jurisdictions. The Company believes it has appropriate support for its federal income tax returns. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for fiscal years prior to 2013, state and local income tax examinations for fiscal years prior to 2012, or non-U.S. income tax examinations by tax authorities for fiscal years prior to 2007. As of September 30, 2016, the Company has $9,766 of undistributed earnings of non-U.S. subsidiaries for which no deferred taxes have been provided as the Company intends to permanently reinvest these earnings outside the U.S. Quantification of the deferred tax liability associated with these undistributed earnings is not practicable.

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- 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
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