Income Taxes

12 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

12. INCOME TAXES

The components of (loss) income from continuing operations before income taxes are as follows:

	Year ended March 31,
	2024			2023		2022
Foreign	$	38,002		$	513	$	46,457
Domestic		(65,346	)		75,264		(92,308	)
	$	(27,344	)	$	75,777	$	(45,851	)

The components of income tax (benefit) expense are as follows:

	Year ended March 31,
	2024		2023			2022
Current:
Federal	$	347	$	(538	)	$	—
State		527		175			(554	)
Foreign		6,249		3,709			5,055
		7,123		3,346			4,501
Deferred:
Foreign		—		14			25
		—		14			25
	$	7,123	$	3,360		$	4,526

A reconciliation of the statutory federal income tax rate to the effective tax rate is as follows:

	Year ended March 31,
	2024			2023			2022
Statutory federal income tax rate		21.0	%		21.0	%		21.0	%
State and local income taxes, net of federal tax benefit		10.0			10.6			17.3
Section 162(m)		(2.8	)		2.7			(4.2	)
Return to provision adjustment		30.2			(4.8	)		(0.4	)
Miscellaneous permanent items and nondeductible accruals		(1.0	)		0.3			(2.4	)
Research and development tax credit		9.0			(2.9	)		5.0
Impact of foreign operations (including rate differential, rate change, and settlement with tax authorities		8.6			3.1			13.8
Valuation allowance		(100.3	)		(25.9	)		(59.4	)
Other (including FIN 48)		(0.7	)		0.3			(0.6	)
Effective income tax rate		(26.0	)%		4.4	%		(9.9	)%

The components of deferred tax assets and liabilities are as follows:

	March 31,
	2024			2023
Deferred tax assets:
Net operating loss and other credit carryforwards	$	223,459		$	302,273
Inventory		17,328			23,584
Accruals and reserves		18,841			21,336
Interest carryforward		96,115			103,826
Pension and other postretirement benefits		69,828			87,846
Lease right-of-use assets		4,650			5,259
Research and development		9,283			4,592
Acquired contract liabilities, net		2,329			3,012
		441,833			551,728
Valuation allowance		(399,179	)		(512,579	)
Net deferred tax assets		42,654			39,149
Deferred tax liabilities:
Deferred revenue		3,473			2,947
Property and equipment		10,632			11,487
Goodwill and other intangible assets		30,457			26,197
Lease liabilities		3,187			3,470
Prepaid expenses and other		2,173			2,316
		49,922			46,417
Net deferred tax liabilities	$	7,268		$	7,268

The Company follows ASC 740, Income Taxes, which prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, as well as guidance on derecognition, classification, interest and penalties, disclosure and transition. The Company's policy is to release the tax effects from accumulated other comprehensive loss when all of the related assets or liabilities that gave rise to the accumulated other comprehensive loss (income) have been derecognized. The Company has elected to treat global intangible low-taxed income (“GILTI”) as a period expense.

A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. When determining the amount of net deferred tax assets that are more likely than not to be realized, the Company assesses all available positive and negative evidence. This evidence includes, but is not limited to, prior earnings history, expected future earnings, carry-back and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income exclusive of reversing taxable temporary differences to outweigh objective negative evidence of recent financial reporting losses.

Based on these criteria and the relative weighting of both the positive and negative evidence available and, in particular, the activity surrounding the Company's prior earnings history, including the forward losses and intangible impairments previously recognized, management determined that it was necessary to establish a valuation allowance against principally all of its net deferred tax assets. Given the objective verifiable negative evidence of a three-year cumulative loss and the weighting of all available positive evidence, the Company excluded projected taxable income (aside from reversing taxable temporary differences) from the assessment of income that could be used as a source of taxable income to realize the deferred tax assets.

During fiscal year 2024, the Company adjusted the valuation allowance against the consolidated net deferred tax asset by $113,396 primarily due to utilization of net operating loss carryforwards, deduction of previously disallowed interest expense deductions, utilization of research and development credits previously carried forward, research and development cost amortization, and pension and other postretirement benefit plans. As of March 31, 2024, management determined that it was necessary to maintain a valuation allowance against principally all of its net deferred tax assets.

As of March 31, 2024, the Company has net operating loss carryforwards of $181,848, $1,308,319, and $174,723 for U.S. federal, state, and foreign jurisdictions, respectively. All Federal net operating losses have an indefinite carryforward period. State net operating losses begin to expire in 2024, with a portion classified as indefinite. Approximately $6,357 of foreign net operating losses begin to expire in 2027, and $168,366 have an indefinite carryforward period.

The Company has been granted income tax holiday as an incentive to attract foreign investment by the Government of Thailand. The tax holidays continue to expire in various years through 2026. The Company does not have any other tax holidays in the jurisdictions in which it operates. The income tax benefit attributable to the tax status of our subsidiaries in Thailand was approximately $1,073 or $0.01 per diluted share in fiscal 2024, $583 or $0.01 per diluted share in fiscal 2023 and $415 or $0.01 per diluted share in fiscal 2022. In connection with the sale of the Company’s Product Support business, the company does not expect a benefit from this tax holiday program in future periods.

At March 31, 2024, cumulative undistributed earnings of foreign subsidiaries, for which no U.S. income or foreign withholding taxes have been recorded is $148,871. As the Company currently intends to indefinitely reinvest all such earnings, no provision has been made for income taxes that may become payable upon distribution of such earnings, and it is not practicable to determine the amount of the related unrecognized deferred income tax liability.

The Company has classified uncertain tax positions as noncurrent income tax liabilities unless expected to be paid in one year.

As of March 31, 2024 and 2023, the total amount of unrecognized tax benefits was $12,281 and $12,085, respectively, all of which would impact the effective rate, if recognized. The Company anticipates that total unrecognized tax benefits may be reduced by zero in the next 12 months. With a few exceptions, the Company is no longer subject to U.S. federal, state, or local income tax examinations, or foreign income tax examinations by tax authorities, for fiscal years ended before March 31, 2014.

As of March 31, 2024, the Company is not subject to any income tax examinations. The Company believes appropriate provisions for all outstanding issues have been made for all jurisdictions and all open years. There are no material interest and penalties accrued as of the year ended March 31, 2024.

A reconciliation of the liability for uncertain tax positions, which are included in deferred taxes for the fiscal years ended March 31, 2024, 2023, and 2022 follows:

	Year ended March 31,
	2024			2023			2022
Beginning balance	$	12,193		$	11,978		$	11,750
Adjustments for tax positions related to the current year		371			223			228
Adjustments for tax positions of prior years		(348	)		(8	)		0
Ending balance	$	12,216		$	12,193		$	11,978