Income Taxes

12 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of income (loss) before income tax benefit are as follows:

	Years Ended   September 30,
	2021		2020
U.S.	$	(1,523)	$	10,071
Non-U.S.	(442)		(1,091)
Income (loss) before income tax benefit	$	(1,965)	$	8,980

Income tax benefit consist of the following:

	Years Ended September 30,
	2021		2020
Current income tax provision (benefit):
U.S. federal	$	(1)	$	—
U.S. state and local	8		19
Non-U.S.	59		192
Total current tax provision	66		211
Deferred income tax provision (benefit):
U.S. federal	10		10
U.S. state and local	(2)		1
Non-U.S.	(1,296)		(433)
Total deferred tax benefit	(1,288)		(422)
Income tax benefit	$	(1,222)	$	(211)

The income tax benefit in the accompanying consolidated statements of operations differs from amounts determined by using the statutory rate as follows:

	Years Ended September 30,
	2021		2020
Income (loss) before income tax benefit	$	(1,965)	$	8,980
Income tax provision (benefit) at U.S. federal statutory rates	$	(413)	$	1,886
Tax effect of:
Foreign rate differential	(193)		—
State and local income taxes	6		20
Federal tax credits	(145)		(135)
Valuation allowance	601		(2,025)
Prior year tax adjustments	(1,115)		—
Other	37		43
Income tax benefit	$	(1,222)	$	(211)

On December 27, 2020, the Consolidated Appropriations Act, 2021 (the "Appropriations Act") was enacted in response to the COVID-19 pandemic. The Appropriations Act, among other actions temporarily extends through December 31, 2025 certain expiring tax credits and other provisions. Additionally, the Appropriations Act enacts new provisions and extends certain provisions originated within the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), enacted on March 27, 2020. The CARES Act included provisions relating to refundable payroll tax credits, deferral of certain payment requirements for the employer portion of Social Security taxes, net operating loss carryback periods and temporarily increasing the amount of

net operating losses that corporations can use to offset income, alternative minimum tax ("AMT") credit refunds, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. The Appropriations Act and CARES Act did not materially affect the Company’s income tax provision, deferred tax assets and liabilities, or related taxes payable for fiscal 2021. The Company will continue to assess the implications of these and any new relief provisions on its consolidated financial statements but does not expect the impact to be material.

Deferred tax assets and liabilities at September 30 consist of the following:

	2021		2020
Deferred tax assets:
Net U.S. operating loss carryforwards	$	3,833	$	3,543
Net non-U.S. operating loss carryforwards	637		789
Employee benefits	1,761		2,688
Inventory reserves	897		1,049
Allowance for doubtful accounts	45		73
Intangibles	1,621		2,197
Foreign tax credits	1,724		1,724
Other tax credits	1,514		1,359
Other	1,216		1,171
Total deferred tax assets	$	13,248	$	14,593
Deferred tax liabilities:
Depreciation	(7,948)		(8,653)
Prepaid expenses	(359)		(376)
Other	(458)		(1,635)
Total deferred tax liabilities	$	(8,765)	$	(10,664)
Net deferred tax assets	4,483		3,929
Valuation allowance	(4,641)		(5,329)
Net deferred tax liabilities	$	(158)	$	(1,400)

At September 30, 2021, the Company has a non-U.S. tax loss carryforward of approximately $5,585 related to the Company’s non-operating and Italian subsidiaries. The Company's non-operating subsidiary ceased operations in 2007 and therefore, a valuation allowance has been recorded against the deferred tax asset related to the Irish tax loss carryforward because it is unlikely that such operating loss can be utilized unless the Irish subsidiary resumes operations. Additionally, a valuation allowance has been recorded against the deferred tax asset related to the Italian tax loss carryforward as it is not more-likely-than-not that the deferred tax asset will be realizable. The non-operating and Italian tax loss carryforwards do not expire.

The Company has $1,724 of foreign tax credit carryforwards that are subject to expiration in fiscal 2023-2028, $1,337 of U.S. general business tax credits that are subject to expiration in 2035-2041, and $14,588 of U.S. Federal tax loss carryforwards with $9,107 subject to expiration in fiscal 2037 and $5,481 that do not expire. A valuation allowance has been recorded against the deferred tax assets related to the foreign tax credit carryforwards, U.S. general business credits, and U.S. Federal tax loss carryforwards.

In addition, the Company has $178 of U.S. state tax credit carryforwards subject to expiration in fiscal 2022-2024 and $21,763 of U.S. state and local tax loss carryforwards subject to expiration in fiscal 2022-2041. The U.S. state tax credit carryforwards and U.S. state and local tax loss carryforwards have been fully offset by a valuation allowance.

The Company reported liabilities for uncertain tax positions, excluding any related interest and penalties, of $22 for both fiscal 2021 and 2020. If recognized, $22 of the fiscal 2021 uncertain tax positions would impact the effective tax rate. As of September 30, 2021, the Company had accrued interest of $15 and recognized $1 for interest and penalties in operations. The Company classifies interest and penalties on uncertain tax positions as income tax expense. A summary of activity related to the Company’s uncertain tax position is as follows:

	2021		2020
Balance at beginning of year	$	22	$	22
Decrease due to lapse of statute of limitations	—		—
Balance at end of year	$	22	$	22

The Company is subject to income taxes in the U.S. federal jurisdiction, Ireland, Italy and various states and local jurisdictions. The Company believes it has appropriate support for its federal income tax returns. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for fiscal years prior to 2018, state and local income tax examinations for fiscal years prior to 2015, or non-U.S. income tax examinations by tax authorities for fiscal years prior to 2007.

The Company does not record deferred taxes on the undistributed earnings of its non-U.S. subsidiaries as it does not expect the temporary differences related to those unremitted earnings to reverse in the foreseeable future. As of September 30, 2021, the Company's non-U.S. subsidiaries had accumulated deficits of approximately $500. Future distributions of accumulated earnings of the Company's non-U.S. subsidiaries may be subject to nominal withholding taxes.