Income Taxes

12 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

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

	Years Ended   September 30,
	2022		2021
U.S.	$	(6,985)	$	(1,523)
Non-U.S.	(2,698)		(442)
Loss before income tax benefit	$	(9,683)	$	(1,965)

Income tax benefit consist of the following:

	Years Ended September 30,
	2022		2021
Current income tax provision (benefit):
U.S. federal	$	—	$	(1)
U.S. state and local	14		8
Non-U.S.	(9)		59
Total current tax provision	5		66
Deferred income tax provision (benefit):
U.S. federal	10		10
U.S. state and local	3		(2)
Non-U.S.	(61)		(1,296)
Total deferred tax benefit	(48)		(1,288)
Income tax benefit	$	(43)	$	(1,222)

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,
	2022		2021
(Loss) before income tax benefit	$	(9,683)	$	(1,965)
Income tax (benefit) at U.S. federal statutory rates	$	(2,033)	$	(413)
Tax effect of:
Foreign rate differential	(46)		(193)
Permanent items	(1,032)		27
State and local income taxes	18		6
Federal tax credits	(157)		(145)
Valuation allowance	3,198		601
Prior year tax adjustments	—		(1,115)
Other	9		10
Income tax benefit	$	(43)	$	(1,222)

On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022, which includes a 15% minimum tax on book income of certain large corporations, a 1% excise tax on net stock repurchases after December 31, 2022, and several tax incentives to promote clean energy. The Company does not believe this legislation will have a material impact on the Company’s consolidated financial statements and will continue to assess the implications.

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

	2022		2021
Deferred tax assets:
Net U.S. operating loss carryforwards	$	6,166	$	3,833
Net non-U.S. operating loss carryforwards	1,023		637
Employee benefits	1,514		1,761
Inventory reserves	1,045		897
Allowance for doubtful accounts	33		45
Intangibles	1,223		1,621
Foreign tax credits	1,724		1,724
Other tax credits	1,684		1,514
Other	1,171		1,216
Total deferred tax assets	$	15,583	$	13,248
Deferred tax liabilities:
Depreciation	(7,298)		(7,948)
Prepaid expenses	(286)		(359)
Other	(419)		(458)
Total deferred tax liabilities	$	(8,003)	$	(8,765)
Net deferred tax assets	7,580		4,483
Valuation allowance	(7,717)		(4,641)
Net deferred tax liabilities	$	(137)	$	(158)

At September 30, 2022, the Company has a non-U.S. tax loss carryforward of approximately $7,190 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, $1,506 of U.S. general business tax credits that are subject to expiration in 2035-2042, $466 of interest expense carryforward that do not expire, and $25,038 of U.S. Federal tax loss carryforwards with $9,107 subject to expiration in fiscal 2037 and $15,931 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 $23,994 of U.S. state and local tax loss carryforwards subject to expiration in fiscal 2023-2042. 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 2022 and 2021. If recognized, $22 of the fiscal 2022 uncertain tax positions would impact the effective tax rate. As of September 30, 2022, the Company had accrued interest of $16 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:

	2022		2021
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 2019, state and local income tax examinations for fiscal years prior to 2016, 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, 2022, the Company's non-U.S. subsidiaries had accumulated deficits of approximately $2,062. Future distributions of accumulated earnings of the Company's non-U.S. subsidiaries may be subject to nominal withholding taxes.