INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2018

Schedule of Income Tax Expense (Benefit)

The components of our income before income tax provision are summarized as follows (in thousands):

	Year Ended March 31,
	2018		2017			2016
Continuing operations:
United States	$	38,507	$	48,069		$	43,885
Foreign		4,893		3,043			3,262
Total - continuing operations	$	43,400	$	51,112		$	47,147
Discontinued operations:
United States	$	-	$	(101	)	$	893

Component of Income before Income Tax Provision

The components of our income tax provision are summarized as follows (in thousands):

	Year Ended March 31,
	2018			2017			2016
Continuing operations:
Current:
Federal	$	11,423		$	16,629		$	13,204
State		1,243			2,237			1,562
Foreign		1,448			841			1,290
Total current income tax provision		14,114			19,707			16,056
Deferred:
Federal		2,698			(1,126	)		178
State		(558	)		(192	)		(128	)
Foreign		(31	)		(56	)		(33	)
Total deferred income tax provision (benefit)		2,109			(1,374	)		17
Total income tax provision - continuing operations	$	16,223		$	18,333		$	16,073

Discontinued operations and gain on sale of discontinued operations:
Current:
Federal	$	-		$	(35	)	$	(835	)
State		-			(3	)		(69	)
Total current income tax benefit		-			(38	)		(904	)
Deferred:
Federal		-			-			1,146
State		-			-			95
Total deferred income tax benefit		-			-			1,241
Total income tax provision (benefit) - discontinued operations and gain on sale of discontinued operations	$	-		$	(38	)	$	337

Effective Income Tax Rate Reconciliation

The income tax provision from continuing operations differs from the amount computed by applying the federal statutory income tax rate to income from continuing operations before income tax provision as follows (in thousands):

	Year Ended March 31,
	2018			2017			2016
Continuing operations:
Income taxes at federal income tax rate	$	13,674		$	17,889		$	16,502
State income taxes, net of federal benefits		364			1,284			917
Non-deductible compensation		326			549			543
Research and development tax credits		(492	)		(410	)		(607	)
Tax-exempt interest income		(3	)		(1	)		(2	)
Qualified production activities income benefit		(599	)		(910	)		(761	)
Federal rate change(1)		3,539			-			-
Other		(586	)		(68	)		(519	)
Total income tax provision from continuing operations	$	16,223		$	18,333		$	16,073

(1) The federal rate change is due to the impact of the Tax Act.

The difference between the effective tax rate and the federal income tax rate is as follows:

	Year Ended March 31,
	2018			2017			2016
Continuing operations:
Income taxes at federal income tax rate(1)		31.5	%		35.0	%		35.0	%
State income taxes, net of federal benefits		0.8	%		2.5	%		2.0	%
Non-deductible compensation		0.8	%		1.1	%		1.1	%
Research and development tax credits		(1.1	)%		(0.8	)%		(1.3	)%
Qualified production activities income benefit		(1.4	)%		(1.8	)%		(1.6	)%
Federal rate change		8.2	%		0.0	%		0.0	%
Other		(1.4	)%		(0.1	)%		(1.1	)%
Effective tax rate		37.4	%		35.9	%		34.1	%

(1) As of January 1, 2018, the U.S. federal corporate tax rate decreased from 35% to 21%, resulting in a blended statutory tax rate of 31.5% for fiscal 2018.

Breakdown Between Current and Non-Current Net Deferred Tax Assets Liabilities

The following table presents the breakdown between current and non-current net deferred tax assets and liabilities (in thousands):

	March 31,
	2018			2017
Deferred tax assets, current	$	-		$	5,644
Deferred tax assets, non-current		7,913			4,392
Deferred tax liabilities, non-current		(203	)		(234	)
Total net deferred tax assets	$	7,710		$	9,802

Significant Components of Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets and liabilities are as follows (in thousands):

	March 31,
	2018			2017
Deferred tax assets:
Research and development tax credit carryforwards	$	1,218		$	917
Capitalized research and development		10			45
Inventory reserves		348			598
Deferred revenue from extended maintenance agreements		550			1,074
Warranty reserves		1,282			1,659
Accrued payroll and other accrued expenses		1,192			1,715
Share-based compensation		4,014			4,753
Alternative minimum tax credits		24			24
Tax on deferred intercompany profit		1,085			1,221
Other		595			696
Total deferred tax assets		10,318			12,702
Deferred tax liabilities:
Depreciation		(2,317	)		(2,518	)
Other		(291	)		(382	)
Total deferred tax liabilities		(2,608	)		(2,900	)
Net deferred tax assets	$	7,710		$	9,802