v3.26.1
Income Taxes (Tables)
 12 Months Ended
Mar. 31, 2026
Income Taxes [Abstract]  
Domestic and Foreign Components of Income (Loss) Income Before Income Taxes
Domestic and foreign components of income (loss) before income taxes are as follows:
 
Years Ended March 31,  
    2026     2025     2024  
Domestic and foreign components of (loss) income
              
United States
 $(7,708,000)   $(21,526,000)   $(29,661,000) 
Foreign
  27,977,000    5,839,000    16,593,000 
Income (loss) before income taxes
  20,269,000    (15,687,000)    (13,068,000) 
Income Tax Expense
The income tax expense is as follows:
 
 
Years Ended March 31,  
    2026     2025     2024  
Current tax (benefit) expense
              
Federal
 $(181,000)   $1,177,000   $1,696,000 
State
  236,000    631,000    363,000 
Foreign
  7,272,000    3,780,000    4,553,000 
Total current tax expense
  7,327,000    5,588,000    6,612,000 
Deferred tax (benefit) expense
              
Federal
  (122,000)    (171,000)    25,320,000 
State
  173,000    (28,000)    4,249,000 
Foreign
  497,000    (1,606,000)    (5,000) 
Total deferred tax (benefit) expense
  548,000    (1,805,000)    29,564,000 
Total income tax expense
 $7,875,000   $3,783,000   $36,176,000 
Deferred Income Taxes
Deferred income taxes consist of the following:
 
         
    March 31, 2026     March 31, 2025  
Assets
         
Allowance for bad debts
 $72,000   $48,000 
Customer allowances earned
  4,310,000    3,794,000 
Allowance for stock adjustment returns
  3,794,000    3,344,000 
Inventory adjustments
  7,925,000    8,497,000 
Intangibles, net
  722,000    729,000 
Stock options
  2,352,000    2,561,000 
Operating lease liabilities
  16,799,000    19,333,000 
Estimate for returns
  34,262,000    30,341,000 
Accrued compensation
  2,917,000    2,585,000 
Net operating losses
  3,883,000    3,426,000 
Tax credits
  1,858,000    2,857,000 
Capitalized research credits
  114,000    1,147,000 
Plant and equipment, net
  2,085,000    1,460,000 
Other
  5,996,000    4,639,000 
Total deferred tax assets
 $87,089,000   $84,761,000 
Liabilities
         
Contract assets
  (10,706,000)    (9,020,000) 
Operating lease assets
  (16,069,000)    (16,848,000) 
Other
  (2,035,000)    (2,453,000) 
Total deferred tax liabilities
 $(28,810,000)   $(28,321,000) 
Less: valuation allowance
 $(54,665,000)   $(52,233,000) 
Total deferred taxes
 $3,614,000   $4,207,000 
Difference Between Income Tax Expense at the Federal Statutory Rate and Effective Tax Rate
The difference between income tax expense at the federal statutory rate and the Company’s effective tax rate, as required under ASU 2023-09, is as follows:
 
             
 
Year Ended March 31,  
 
2026  
Statutory federal income tax rate
 $4,256,000     21.0 %
State and local income taxes, net of federal income tax effect (1)
  347,000     1.7 %
Foreign tax effects
           
Mexico
           
Tax rate differential
  1,505,000     7.4 %
Change in valuation allowance
 (696,000 )   (3.4 )%
Canada
           
Tax rate differential
 (235,000 )   (1.1 )%
Change in valuation allowance
  1,315,000     6.5 %
Other
  15,000     0.1 %
Effect of changes in tax laws or rates enacted in the current period
  -     - %
Effect of cross-border tax laws
  609,000     3.0 %
Tax credits
           
Research and development credit
 (256,000 )   (1.3 )%
Change in valuation allowance
  1,366,000     6.8 %
Nontaxable or nondeductible items
           
Non-deductible executive compensation
  524,000     2.6 %
Excess tax benefit from share-based compensation
 (374,000 )   (1.9 )%
Other
  90,000     0.4 %
Change in unrecognized tax benefits
 (405,000 )   (2.0 )%
Other adjustments
 (186,000 )   (0.9 )%
             
   $7,875,000     38.9 %
(1)
State taxes in California, Illinois, and Pennsylvania made up the majority (greater than 50%) of the tax effect in this category
 
The difference between the income tax expense at the federal statutory rate and the Company’s effective tax rate, prior to the adoption of ASU 2023-09, is as follows:
 
             
 
Years Ended March 31,  
 
2025 
2024 
Statutory federal income tax rate
  21 %   21 %
State income tax rate, net of federal benefit
  1.5 %   10.8 %
Excess tax benefit from share-based compensation
  (1.3 )%   (4.8 )%
Foreign income taxed at different rates
  (3.8 )%   (9.8 )%
Non-deductible debt costs
  (1.2 )%   - %
Non-deductible executive compensation
  (2.5 )%   (2.6 )%
Change in valuation allowance
  (40.1 )%   (289.1 )%
Uncertain tax positions
  2.6 %   0.9 %
Research and development credit
  0.6 %   0.7 %
Other
  (0.9 )%   (3.9 )%
    (24.1 )%   (276.8 )%
Cash Paid for Income Taxes by Jurisdiction, Net of Refunds Received
Cash paid for income taxes by jurisdiction, net of refunds received, as required under ASU 2023-09, is as follows:
 
     Year Ended March 31,  
     2026  
Cash paid for income taxes:
    
Federal
$1,810,000 
State
  174,000 
Foreign
    
Mexico
  5,824,000 
Other jurisdictions
  272,000 
Total cash paid for income taxes
 $8,080,000 
Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 
                
 
Years Ended March 31,  
    2026     2025     2024  
Balance at beginning of period
 $1,362,000   $1,784,000   $1,964,000 
Additions based on tax positions related to the current year
  12,000    53,000    15,000 
Additions for tax positions of prior year
  -    43,000    15,000 
Reductions for tax positions of prior year
  (461,000)    (518,000)    (210,000) 
Balance at end of period
 $913,000   $1,362,000   $1,784,000