INCOME TAXES

The calculation of the effective tax rate is as follows (in thousands):



	Three months ended June 30,						Nine months ended June 30,
	2018			2017			2018			2017
Income (loss) before income taxes	$	689		$	(6,898	)	$	(11,134	)	$	(10,812	)

Income tax provision (benefit)	388			(3,683		)	(2,443		)	(6,469		)

Net income (loss)	$	301		$	(3,215	)	$	(8,691	)	$	(4,343	)

Effective tax rate	56		%	53		%	22		%	60		%

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the Act). The Act lowers the corporate tax rate from 35% to 21% effective January 1, 2018. As a result, the U.S. federal statutory rate for Fiscal 2018 is a reduced blended U.S. tax rate of 24.5%. The final impact of the Act may differ from our estimates based on changes in interpretations or assumptions we make, as well as the issuance of additional guidance.

In the third quarter of Fiscal 2018, the effective tax rate was negatively impacted by the relative amounts of income/loss recognized in various jurisdictions as well as a foreign tax loss which is reserved with a valuation allowance. The effective tax rate for the third quarter of Fiscal 2017 was favorably impacted by discrete items recognized during the quarter, primarily related to the Research and Development Tax Credit (R&D Tax Credit). The effective tax rate for the third quarter of Fiscal 2017 was also favorably impacted by the lower tax rate in the United Kingdom, the relative amounts of income/loss recognized in various jurisdictions, as well as the utilization of net operating loss carryforwards in Canada that are fully reserved with a valuation allowance.

The effective tax rate for the nine months ended June 30, 2018 decreased due to the lower U.S. corporate tax rate as well as a foreign tax loss which is reserved with a valuation allowance. Additionally we recorded deferred tax expense of $0.7 million due to the re-measurement of our U.S. deferred tax assets under the Act, which are not expected to be realized prior to the end of Fiscal 2018. The effective tax rate for the nine months ended June 30, 2017 was favorably impacted by discrete items, primarily related to the R&D Tax Credit. The effective tax rate for the nine months ended June 30, 2017 was also favorably impacted by the lower tax rate in the United Kingdom, the relative amounts of income/loss recognized in various jurisdictions, as well as the utilization of net operating loss carryforwards in Canada that are fully reserved with a valuation allowance.