Income Taxes (Tables)

12 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Provision for Income Tax Expense

The provision for income tax expense consists of:

	Years Ended September 30,
	2014		2013
Current:
Federal	$	667,000	$	(48,000	)
State		65,000		146,000
Total current		732,000		98,000
Deferred
Federal		190,000		(447,000	)
State		18,000		(43,000	)
Total deferred		208,000		(490,000	)
Income tax expense (benefit)	$	940,000	$	(392,000	)

Reconciliation of the Federal Statutory Tax Rate to the Total Tax Provision

A reconciliation of the federal statutory tax rate to the total tax provision is as follows:

	Years Ended September 30,
	2014			2013
Federal income taxes computed at the statutory rate		34.0	%		34.0	%
State income taxes, net of federal benefit		3.3	%		3.3	%
Research & development tax refunds & credits		(5.6	%)		(33.6	%)
Dividend received deduction		(6.1	%)		(3.0	%)
Domestic international sales corporation benefits		(4.2	%)		(1.8	%)
Tax-exempt interest income		(1.8	%)		(1.4	%)
Other, net		1.7	%		(3.7	%)
Effective income tax rate		21.3	%		(6.2	%)

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities consist of the following:

	Years Ended September 30,
	2014			2013
Deferred Tax Assets:
Accrued liabilities and reserves	$	288,000		$	338,000
Allowance for doubtful accounts		91,000			115,000
Inventory		186,000			202,000
R&D tax credits carryforwards		671,000			805,000
Non-deductible stock compensation		194,000			178,000
Net operating losses carryforwards		58,000			59,000
Other		24,000			57,000
Gross Deferred Tax Assets		1,512,000			1,754,000
Deferred and Other Tax Liabilities:
Unrealized gain on investments		(798,000	)		(736,000	)
Percentage of completion		(104,000	)		—
Property, plant and equipment		(964,000	)		(1,179,000	)
Unrecognized tax benefits		(300,000	)		(300,000	)
Other		(39,000	)		(23,000	)
Gross Deferred and Other Tax Liabilities		(2,205,000	)		(2,238,000	)
Net Deferred Income and Other Tax Liabilities	$	(693,000	)	$	(484,000	)