| Income Taxes |
Note 11 – Income Taxes: An analysis of the components of income before provision for income taxes is presented below:
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Year ended March 31, |
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2026 |
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2025 |
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2024 |
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United States |
|
$ |
15,038 |
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|
$ |
14,381 |
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|
$ |
5,077 |
|
Asia |
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(278 |
) |
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|
1,026 |
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|
497 |
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Income before provision for income taxes |
|
$ |
14,760 |
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$ |
15,407 |
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$ |
5,574 |
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The provision for income taxes consists of:
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Year ended March 31, |
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2026 |
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2025 |
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|
2024 |
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Current: |
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|
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Federal |
|
$ |
170 |
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|
$ |
1,387 |
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$ |
1,133 |
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State |
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154 |
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37 |
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|
100 |
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Foreign |
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8 |
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|
282 |
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257 |
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332 |
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1,706 |
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|
1,490 |
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Deferred: |
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Federal |
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2,030 |
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5,429 |
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(419 |
) |
State |
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(16 |
) |
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210 |
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88 |
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Foreign |
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(124 |
) |
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25 |
|
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(106 |
) |
Changes in valuation allowance |
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38 |
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(4,193 |
) |
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(35 |
) |
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1,928 |
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1,471 |
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(472 |
) |
Total provision for income taxes |
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$ |
2,260 |
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$ |
3,177 |
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$ |
1,018 |
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Below is a tabular rate reconciliation pursuant to the disclosure requirements of ASU 2023-09, adopted prospectively for the year ended March 31, 2026:
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Year ended March 31, 2026 |
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Amount |
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Percent |
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Provision for income taxes as U.S. federal statutory rate |
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$ |
3,100 |
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|
21.0 |
% |
State and local income taxes, net of federal income tax effect |
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|
139 |
|
|
|
0.9 |
% |
Foreign tax effects |
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(60 |
) |
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(0.4 |
)% |
Nontaxable or nondeductible items |
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162(m) |
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604 |
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4.1 |
% |
Share based compensation |
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(667 |
) |
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(4.5 |
)% |
Other |
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(31 |
) |
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(0.2 |
)% |
Effect of cross-border tax laws |
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(30 |
) |
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(0.2 |
)% |
Tax credits |
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R&D tax credit |
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(790 |
) |
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(5.4 |
)% |
Other |
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(5 |
) |
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— |
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Effective tax rate |
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$ |
2,260 |
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15.3 |
% |
The reconciliation of the provision calculated using the U.S. federal tax rate with the provision for income taxes presented in the consolidated financial statements is as follows:
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Year ended March 31, |
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2025 |
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2024 |
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Provision for income taxes at federal rate |
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$ |
3,238 |
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$ |
1,170 |
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State taxes |
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|
196 |
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|
156 |
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Charges not deductible for income tax purposes |
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45 |
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54 |
|
Stock based compensation |
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(382 |
) |
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(8 |
) |
Research and development tax credits |
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(308 |
) |
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(327 |
) |
Valuation allowance |
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(4,193 |
) |
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(35 |
) |
Effect of foreign tax rate |
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50 |
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26 |
|
Uncertain tax positions |
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140 |
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— |
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Nondeductible fringe benefits |
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31 |
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30 |
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162(m) |
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|
420 |
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|
105 |
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Foreign withholding tax |
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9 |
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— |
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Foreign-derived intangible income deduction |
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(61 |
) |
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(134 |
) |
Global intangible low-taxed income |
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— |
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(20 |
) |
Capital loss expiration |
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4,211 |
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— |
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Earnout revaluation |
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(239 |
) |
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— |
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Other |
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20 |
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|
1 |
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Provision for income taxes |
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$ |
3,177 |
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$ |
1,018 |
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In accordance with the adoption of ASU 2023-09, the Company paid cash for income taxes, net of refunds, for the year ended March 31, 2026 as follows:
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March 31, |
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2026 |
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U.S. Federal |
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$ |
(144 |
) |
U.S. State and local |
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New York |
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(25 |
) |
Texas |
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26 |
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Pennsylvania |
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42 |
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Other |
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|
7 |
|
Total U.S. State and local |
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50 |
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Foreign |
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China |
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16 |
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India |
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42 |
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Total Foreign |
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|
58 |
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Total cash paid for income taxes, net of refunds |
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$ |
(36 |
) |
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:
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March 31, |
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2026 |
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|
2025 |
|
Depreciation |
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$ |
(4,796 |
) |
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$ |
(3,060 |
) |
Accrued compensation |
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|
377 |
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|
322 |
|
Goodwill |
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(1,460 |
) |
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(1,007 |
) |
Prepaid pension asset |
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(1,461 |
) |
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(1,278 |
) |
Compensated absences |
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|
695 |
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|
641 |
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Inventories |
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|
669 |
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645 |
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Warranty liability |
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188 |
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171 |
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Accrued expenses |
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627 |
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|
445 |
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Equity-based compensation |
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633 |
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|
475 |
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Operating lease assets |
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(1,574 |
) |
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(1,460 |
) |
Operating lease liabilities |
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1,686 |
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1,557 |
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Acquisition costs |
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— |
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|
163 |
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Intangible assets |
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|
407 |
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|
71 |
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New York State investment tax credit |
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1,086 |
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|
1,048 |
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Research and development cost |
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|
179 |
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3,612 |
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Research and development credit carryforward |
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|
479 |
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|
— |
|
Net operating loss carryforwards |
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2,697 |
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|
280 |
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Other |
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(112 |
) |
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(99 |
) |
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|
320 |
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|
2,526 |
|
Less: Valuation allowance |
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(1,086 |
) |
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(1,048 |
) |
Net |
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$ |
(766 |
) |
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$ |
1,478 |
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Presented as follows: |
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Noncurrent deferred income tax assets |
|
$ |
131 |
|
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$ |
1,502 |
|
Noncurrent deferred income tax liabilities |
|
|
(897 |
) |
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(24 |
) |
Net |
|
$ |
(766 |
) |
|
$ |
1,478 |
|
Deferred income taxes include the impact of state investment tax credits of $292, which expire from 2030 to 2040 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, 2026 related to certain state investment tax credits would not be realized and recorded a valuation allowance of $1,086. 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 2022 through 2025 and examination in state tax jurisdictions for tax years 2021 through 2025. The Company is subject to examination in the People's Republic of China for tax years 2022 through 2025 and in India for tax years 2022 through 2025. The liability for unrecognized tax benefits was $0 at each of March 31, 2026 and 2025.
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