Income Taxes (Tables)

12 Months Ended

Sep. 30, 2017

Components of Income (Loss) Before 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	)

Computation of Provision (Benefit) for Income Taxes

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	)

Reconciliation of Actual Income Tax Expenses (Benefits)

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	%

Components of Net Deferred Income Tax Asset

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

Net Classification of Deferred Income Tax Assets and Liabilities in Balance Sheet

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

Reconciliation of the Total Amounts of Unrecognized Tax Liabilities

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	$	—