Income Taxes

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

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

	Years Ended   September 30,
	2023		2022
U.S.	$	(10,260)	$	(6,985)
Non-U.S.	1,727		(2,698)
Loss before income tax benefit	$	(8,533)	$	(9,683)

Income tax provision (benefit) consist of the following:

	Years Ended September 30,
	2023		2022
Current income tax provision (benefit):
U.S. federal	$	—	$	—
U.S. state and local	2		14
Non-U.S.	152		(9)
Total current tax provision	154		5
Deferred income tax provision (benefit):
U.S. federal	10		10
U.S. state and local	3		3
Non-U.S.	(8)		(61)
Total deferred tax provision (benefit)	5		(48)
Income tax provision (benefit)	$	159	$	(43)

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

	Years Ended September 30,
	2023		2022
Loss before income tax provision (benefit)	$	(8,533)	$	(9,683)
Income tax provision (benefit) at U.S. federal statutory rates	(1,792)		(2,033)
Tax effect of:
Foreign rate differential	(331)		(46)
Permanent items	83		(1,032)
State and local income taxes	5		18
Federal tax credits	(179)		(157)
Valuation allowance	2,363		3,198
Other	10		9
Income tax provision (benefit)	$	159	$	(43)

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

	2023		2022
Deferred tax assets:
Net U.S. operating loss carryforwards	$	8,107	$	6,166
Net non-U.S. operating loss carryforwards	740		1,023
Employee benefits	1,088		1,514
Inventory reserves	569		1,045
Allowance for doubtful accounts	62		33
Intangibles	759		1,223
Foreign tax credits	1,724		1,724
Other tax credits	1,882		1,684
Other	2,130		1,171
Total deferred tax assets	$	17,061	$	15,583
Deferred tax liabilities:
Depreciation	(6,548)		(7,298)
Prepaid expenses	(355)		(286)
Other	(408)		(419)
Total deferred tax liabilities	$	(7,311)	$	(8,003)
Net deferred tax assets	9,750		7,580
Valuation allowance	(9,892)		(7,717)
Net deferred tax liabilities	$	(142)	$	(137)

At September 30, 2023, the Company has a non-U.S. tax loss carryforward of approximately $5,988 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 2025-2028, $1,705 of U.S. general business tax credits that are subject to expiration in 2035-2043, $1,001 of interest expense carryforward that do not expire, and $33,205 of U.S. Federal tax loss carryforwards with $9,107 subject to expiration in fiscal 2037 and $24,098 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, interest expense carryforward, 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 2024 and $28,561 of U.S. state and local tax loss carryforwards subject to expiration in fiscal 2024-2043. 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 2023 and 2022. If recognized, $22 of the fiscal 2023 uncertain tax positions would impact the effective tax rate. As of September 30, 2023, the Company had accrued interest of $17 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:

	2023		2022
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 2020, state and local income tax examinations for fiscal years prior to 2017, 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, 2023, the Company's non-U.S. subsidiaries had accumulated deficits of approximately $731. Future distributions of accumulated earnings of the Company's non-U.S. subsidiaries may be subject to nominal withholding taxes.