Taxes on Income (Tables)

12 Months Ended

Feb. 01, 2020

Income Tax Disclosure [Abstract]

Schedule of loss before income taxes

Geographic sources of loss before income taxes are as follows:

	Year Ended
(In thousands)	February 1, 2020			February 2, 2019
United States	$	(4,490	)	$	(7,399	)
Foreign		(9,342	)		(2,239	)
Loss before income taxes	$	(13,832	)	$	(9,638	)

Schedule of income tax provision as shown in the income statements

The provision for income taxes as shown in the accompanying consolidated statements of operations includes the following:

	Year Ended
(In thousands)	February 1, 2020			February 2, 2019
Current:
Federal	$	—		$	—
State		79			(11	)
Foreign		1,029			941
		1,108			930
Deferred:
Federal		—			—
State		(27	)		37
Foreign		(3,413	)		934
		(3,440	)		971
	$	(2,332	)	$	1,901

Schedule of reconciliation of the actual income tax rates to the federal statutory rate

The provision for income taxes differs from the amounts computed using the statutory United States federal income tax rate as shown in the table below.  Nondeductible transaction costs arose in the Hi-Tec Acquisition.

	Year Ended
(In thousands, except percentages)	February 1, 2020					February 2, 2019
Tax expense at U.S. statutory rate	$	(2,905	)	21.0	%	$	(2,023	)	21.0	%
State income taxes, net of federal income tax benefit		443		(3.2	)		265		(2.7	)
Stock-based compensation		151		(1.1	)		262		(2.7	)
Adjustments to unrecognized tax benefits		(2,769	)	20.0			(380	)	3.9
Nondeductible expenses		6		—			12		(0.1	)
Nondeductible transaction costs		—		—			21		(0.2	)
Valuation allowance		3,388		(24.5	)		4,616		(47.9	)
Foreign Taxes		630		(4.6	)		381		(4.0	)
Indefinite-lived intangible assets		(1,429	)	10.3			(787	)	8.2
Other		153		(1.1	)		(466	)	4.8
	$	(2,332	)	16.8	%	$	1,901		(19.7	)%

Summary of deferred income tax assets

A summary of deferred income tax assets and liabilities is as follows:

	Year Ended
(In thousands)	February 1, 2020			February 2, 2019
Deferred tax assets:
Deferred revenue	$	16		$	9
Amortization		1,576			3,855
Other		271			359
Employee compensation		106			242
Interest expense carryforward		1,844			1,277
Net operating loss and credit carryforwards		31,095			26,089
Valuation Allowance		(34,759	)		(31,472	)
Total deferred income tax assets		149			359
Deferred tax liabilities:
Amortization		(9,664	)		(11,627	)
Total deferred income tax liabilities		(9,664	)		(11,627	)
Net deferred income tax liabilities	$	(9,515	)	$	(11,268	)

Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits

The Company recorded a $3.9 million reserve for uncertain tax positions in Fiscal 2017 as part of Hi-Tec acquisition.  Gross unrecognized tax benefits are reflected in the accompanying balance sheets as reductions in deferred tax assets or in other long-term liabilities if there are no net operating loss carryforwards available to offset them.  The Company was granted approval in Fiscal 2020 to combine certain of its subsidiaries in the Netherlands as one tax filing group.  This determination allowed the Company to recognize certain tax benefits from uncertain tax positions taken in prior years.  A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:

	Year Ended
(In thousands)	February 1, 2020			February 2, 2019
Gross unrecognized tax benefits at beginning of year	$	3,416		$	3,846
Additions:
Tax positions taken in the current year		—			426
Reductions:
Tax positions taken in prior years		(2,729	)		(261	)
Lapse in statute of limitations		—			(595	)
Gross unrecognized tax benefits at year end	$	687		$	3,416