Income Taxes (Tables)

12 Months Ended

Sep. 30, 2018

Components of Income (Loss) Before Income Taxes

Components of income (loss) before income taxes were as follows (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2018			2017			2016
United States	$	(19,231	)	$	(50,757	)	$	(45,506	)
Foreign		(561	)		(3,351	)		(9,827	)
	$	(19,792	)	$	(54,108	)	$	(55,333	)

Computation of Provision (Benefit) for Income Taxes

The provision (benefit) for income taxes consisted of the following (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2018			2017			2016
Current
Federal	$	(613	)	$	2,422		$	(13,726	)
Foreign		51			286			148
State		—			—			6
		(562	)		2,708			(13,572	)
Deferred:
Federal		—			—			2,881
Foreign		(18	)		(25	)		1,328
		(18	)		(25	)		4,209
	$	(580	)	$	2,683		$	(9,363	)

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 24.5% (blended) for the fiscal year ended September 30, 2018 and 35% for the fiscal years ended September 30, 2017 and 2016 as follows (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2018			2017			2016
Benefit for U.S federal income tax at statutory rate	$	(4,849	)	$	(18,940	)	$	(19,365	)
Effect of foreign income taxes		(47	)		124			630
Research and experimentation tax credit		(320	)		(248	)		(686	)
State income taxes, net of federal income tax benefit		(23	)		—			4
Nondeductible expenses		33			164			149
Resolution of prior years’ tax matters		(657	)		2			2,400
Change in valuation allowance		(4,237	)		20,087			7,715
Impact on deferred taxes due to change in tax rate		8,116			(6	)		(124	)
Difference in U.S. tax rate from assumed rate		511			—			—
Foreign income taxes		11			506			—
Disallowance of stock compensation adjustments in excess of book		895			1,074			—
Other items		(13	)		(80	)		(86	)
	$	(580	)	$	2,683		$	(9,363	)
Effective tax rate		2.9	%		(5.0	)%		16.9	%

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, 2018									AS OF SEPTEMBER 30, 2017
	U.S.			Non U.S.			Total			U.S.			Non U.S.			Total
Deferred income tax assets:
Allowance for doubtful accounts	$	545		$	8		$	553		$	777		$	7		$	784
Inventories		6,870			68			6,938			11,215			50			11,265
Loss and tax credit carry-forwards		17,056			4,151			21,207			11,803			4,490			16,293
Stock-based compensation		614			—			614			2,147			—			2,147
Accrued product warranty		136			8			144			174			2			176
Accrued compensated absences		259			—			259			419			—			419
Property and equipment		—			457			457			—			430			430
Prepaid income taxes		714			—			714			—			—			—
Other reserves		56			6			62			127			7			134
		26,250			4,698			30,948			26,662			4,986			31,648
Deferred income tax liabilities:
Allowance for doubtful accounts		—			(6	)		(6	)		—			(9	)		(9	)
Intangible assets		(1,681	)		—			(1,681	)		—			—			—
Property, plant and equipment and other		(3,622	)		(59	)		(3,681	)		(3,087	)		(71	)		(3,158	)
Subtotal deferred income tax assets		20,947			4,633			25,580			23,575			4,906			28,481
Valuation allowance		(20,931	)		(4,448	)		(25,379	)		(23,575	)		(4,684	)		(28,259	)
Net deferred income tax assets	$	16		$	185		$	201		$	—		$	222		$	222

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,
	2018			2017
Deferred income tax assets, net	$	246		$	259
Deferred income tax liabilities, net		(45	)		(37	)
	$	201		$	222

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, 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		—
Change in prior year tax positions		—
Current tax positions		—
Settlements with taxing authorities		—
Lapse of statute of limitations		—
Balance at September 30, 2018	$	—