Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.22.1
Income Taxes
 12 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

Note 10 – Income Taxes:

An analysis of the components of (loss) income before (benefit) provision for income taxes is presented below:

 

 

 

Year ended March 31,

 

 

 

2022

 

 

2021

 

 

2020

 

United States

 

$

(11,954

)

 

$

(602

)

 

$

2,405

 

Asia

 

 

738

 

 

 

3,869

 

 

 

(93

)

 

 

$

(11,216

)

 

$

3,267

 

 

$

2,312

 

 

The (benefit) provision for income taxes consists of:

 

 

 

Year ended March 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

(31

)

 

$

924

 

 

$

547

 

State

 

 

72

 

 

 

62

 

 

 

176

 

Foreign

 

 

749

 

 

 

468

 

 

 

4

 

 

 

 

790

 

 

 

1,454

 

 

 

727

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

 

(2,648

)

 

 

(960

)

 

 

(694

)

State

 

 

(155

)

 

 

(116

)

 

 

8

 

Foreign

 

 

(423

)

 

 

508

 

 

 

(12

)

Changes in valuation allowance

 

 

(7

)

 

 

7

 

 

 

411

 

 

 

 

(3,233

)

 

 

(561

)

 

 

(287

)

Total (benefit) provision for income taxes

 

$

(2,443

)

 

$

893

 

 

$

440

 

 

The reconciliation of the (benefit) provision calculated using the U.S. federal tax rate with the (benefit) provision for income taxes presented in the consolidated financial statements is as follows:

 

 

 

Year ended March 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Provision (benefit) for income taxes at federal rate

 

$

(2,355

)

 

$

686

 

 

$

486

 

State taxes

 

 

(96

)

 

 

(35

)

 

 

120

 

Charges not deductible for income tax purposes

 

 

147

 

 

 

158

 

 

 

55

 

Research and development tax credits

 

 

(295

)

 

 

(172

)

 

 

(211

)

Valuation allowance

 

 

(7

)

 

 

7

 

 

 

411

 

Difference in federal rate

 

 

31

 

 

 

156

 

 

 

(1

)

Foreign withholding tax

 

 

138

 

 

 

—

 

 

 

—

 

Foreign tax credit

 

 

—

 

 

 

(84

)

 

 

—

 

Foreign-derived intangible income deduction

 

 

(2

)

 

 

(81

)

 

 

(95

)

Global intangible low-taxed income

 

 

—

 

 

 

405

 

 

 

(1

)

Net operating loss carryback

 

 

—

 

 

 

(146

)

 

 

—

 

Capital loss from sale of Energy Steel

 

 

—

 

 

 

—

 

 

 

(325

)

Other

 

 

(4

)

 

 

(1

)

 

 

1

 

Provision for income taxes

 

$

(2,443

)

 

$

893

 

 

$

440

 

 

The net deferred income tax asset (liability) recorded in the Consolidated Balance Sheets results from differences between financial statement and tax reporting of income and deductions. A summary of the composition of the Company's net deferred income tax asset (liability) follows:

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

Depreciation

 

$

(3,345

)

 

$

(1,772

)

Accrued compensation

 

 

362

 

 

 

147

 

Goodwill

 

 

180

 

 

 

—

 

Prepaid pension asset

 

 

(1,557

)

 

 

(1,386

)

Accrued pension liability

 

 

291

 

 

 

347

 

Accrued postretirement benefits

 

 

105

 

 

 

131

 

Compensated absences

 

 

515

 

 

 

435

 

Inventories

 

 

899

 

 

 

462

 

Warranty liability

 

 

99

 

 

 

140

 

Accrued expenses

 

 

1,230

 

 

 

585

 

Equity-based compensation

 

 

240

 

 

 

337

 

Operating lease assets

 

 

(1,954

)

 

 

(22

)

Operating lease liabilities

 

 

1,990

 

 

 

23

 

Acquisition costs

 

 

152

 

 

 

—

 

Intangible assets

 

 

158

 

 

 

—

 

New York State investment tax credit

 

 

1,108

 

 

 

1,115

 

Research and development tax credit

 

 

240

 

 

 

—

 

Net operating loss carryforwards

 

 

2,748

 

 

 

—

 

Capital loss related to sale of Energy Steel

 

 

4,211

 

 

 

4,211

 

Other

 

 

26

 

 

 

(62

)

 

 

 

7,698

 

 

 

4,691

 

Less: Valuation allowance

 

 

(5,319

)

 

 

(5,326

)

Total

 

$

2,379

 

 

$

(635

)

 

 

Deferred income taxes include the impact of state investment tax credits of $314, which expire from 2023 to 2036 and state investment tax credits of $794, which have an unlimited carryforward period.

In assessing the realizability of deferred tax assets, management considers, within each taxing jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the consideration of the weight of both positive and negative evidence, management determined that a portion of the deferred tax assets as of March 31, 2022 and 2021 related to certain state investment tax credits and the capital loss related to Energy Steel would not be realized, and recorded a valuation allowance of $5,319 and $5,326, respectively.

The Company files federal and state income tax returns in several domestic and international jurisdictions. In most tax jurisdictions, returns are subject to examination by the relevant tax authorities for a number of years after the returns have been filed. The Company is subject to U.S. federal examination for tax years 2018 through 2021 and examination in state tax jurisdictions for tax years 2017 through 2021. The Company is subject to examination in the People's Republic of China for tax years 2018 through 2021 and in India for tax years 2018 through 2021. The liability for unrecognized tax benefits was $0 at each of March 31, 2022 and 2021.

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security ("CARES") Act into law. The CARES Act included several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses and allow businesses to carry back net operating losses arising in 2018, 2019 and 2020 to the five prior tax years, accelerate refunds of previously generated corporate alternative minimum tax credits, change the business interest limitation under IRC section 163(j) from 30% to 50%, and fix qualified improvement property from the Tax Cuts and Jobs Act (the "Tax Act"). These provisions did not have a material impact on the Company’s consolidated financial statements.