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Income Taxes (Tables)

12 Months Ended

Sep. 30, 2020

Schedule of Components of Income Tax Provision (Benefit)

The components of the income tax provision (benefit) were as follows (in thousands):


	Year Ended September 30,
	2020		2019		2018
Current:
Federal	$	945	$	1,350	$	973
State	1,186		186		201
Foreign	66		88		449
	2,197		1,624		1,623
Deferred:
Federal	1,045		366		(1,834)
State	(91)		457		(247)
Foreign	519		(3)		(89)
	1,473		820		(2,170)
Total income tax provision (benefit)	$	3,670	$	2,444	$	(547)

Schedule of Income (Loss) Before Income Taxes

Income (loss) before income taxes was as follows (in thousands):


	Year Ended September 30,
	2020		2019		2018
U.S.	$	21,243	$	11,859	$	(2,103)
Foreign	(913)		475		(5,596)
Income (loss) before income taxes	$	20,330	$	12,334	$	(7,699)

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the statutory U.S. income tax rate and the effective income tax rate, as computed on earnings before income tax provision in each of the three years presented in the Consolidated Statements of Operations, was as follows:


	Year Ended September 30,
	2020		2019		2018
Statutory rate	21	%	21	%	25	%
State income taxes, net of federal benefit	5		4		(2)
Research and development credit	(13)		(7)		9
Foreign rate differential	—		1		1
Foreign withholding	—		1		(3)
Valuation allowance	4		(2)		(20)

Deferred tax rate differential	—		—		(4)
Other	1		2		1
Effective rate	18	%	20	%	7	%

Schedule of Deferred Tax Assets and Liabilities

The net deferred income tax asset was comprised of the following (in thousands):


	September 30,
	2020		2019





Gross assets	$	18,326	$	18,851
Gross liabilities and valuation allowance	(14,682)		(13,734)
Net deferred income tax asset	$	3,644	$	5,117

The tax effect of temporary differences between U.S. GAAP accounting and federal income tax accounting creating deferred income tax assets and liabilities was as follows (in thousands):


	September 30,
	2020		2019
Deferred Tax Assets:
Net operating loss	$	10,823	$	10,636
Credit carryforwards	1,490		2,895
Deferred compensation	1,681		1,590
Uniform capitalization and inventory	1,067		983
Stock-based compensation	1,079		744
Reserve for accrued employee benefits	929		752
Warranty accrual	655		682
Accrued legal	112		115
Postretirement benefits liability	111		110


Other	379		344
Deferred tax assets	$	18,326	$	18,851
Deferred Tax Liabilities:
Depreciation and amortization	$	(5,035)	$	(5,138)
Retention and other	(620)		(365)
Deferred tax liabilities	$	(5,655)	$	(5,503)
Less: valuation allowance	(9,027)		(8,231)
Net deferred tax asset	$	3,644	$	5,117

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of the unrecognized tax benefits follows (in thousands):


	Year Ended September 30,
	2020		2019		2018
Balance at beginning of period	$	2,703	$	1,854	$	1,219
Increases related to tax positions taken during the current period	220		240		180
Increases related to tax positions taken during a prior period	97		609		455
Decreases related to expiration of statute of limitations	(545)		—		—
Decreases related to settlement with taxing authorities	(1,223)		—		—
Balance at end of period	$	1,252	$	2,703	$	1,854