Income Taxes (Tables)

12 Months Ended

Sep. 30, 2019

Schedule of Income before Income Tax, Domestic and Foreign

For financial reporting purposes, (loss) income before income taxes includes the following components:



	Year Ended September 30,
	2019			2018			2017
Domestic	$	(9,140	)	$	(8,613	)	$	12,833
Foreign	10,256			17,879			994
Income before income taxes	$	1,116		$	9,266		$	13,827

Schedule of Components of Income Tax Expense (Benefit)

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



	Year Ended September 30,
	2019			2018			2017
Current:
Federal	$	—		$	—		$	(876	)
State	(400		)	(911		)	—
Foreign	(7,239		)	(6,703		)	(5,268		)
	(7,639		)	(7,614		)	(6,144		)
Deferred:
Federal	(3,597		)	6,311			(2,350		)
State	196			(209		)	(421		)
Foreign	1,453			130			1,498
	(1,948		)	6,232			(1,273		)
Total income tax expense	$	(9,587	)	$	(1,382	)	$	(7,417	)

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of income tax (expense) benefit and the amount computed by applying 21% for the year ended September 30, 2019, the blended statutory federal income tax rate of 24.5% for the year ended September 30, 2018 and 35% for the year ended September 30, 2017 to income from operations before income taxes was as follows:



	Year Ended September 30,
	2019			2018			2017
Income tax (expense) benefit at the federal statutory rate of 21%	$	(234	)	$	(2,270	)	$	(4,839	)
State and local income taxes, net of federal tax benefit	(204		)	(1,053		)	(34		)
Foreign tax rate differential	(1,471		)	(2,389		)	914
Nondeductible transaction costs	—			(1,489		)	—
Nondeductible interest expense	(1,073		)	(853		)	(1,396		)
Meals and entertainment expense	(953		)	(553		)	(649		)
U.S. tax on foreign earnings	(1,421		)	—			—
Nondeductible legal expenses	(112		)	—			(859		)
Other nondeductible expenses	(223		)	(47		)	(488		)
Impact of tax rate changes	(548		)	3,626			—
Valuation allowances	(3,886		)	(4,218		)	(2,264		)
Share-based compensation in excess of accounting	475			5,156			—
Nondeductible loss on sale of subsidiary	—			1,131			—
Return-to-provision adjustments	(655		)	449			895
Non-controlling interest	221			428			1,486
Net benefit of foreign R&D expenses	191			336			(1,060		)
Transaction related contingent liabilities	(58		)	89			—
Puerto Rico taxes, net of federal benefit	—			—			(556		)
Contingent liabilities - warranty	93			—			566
Contingent liabilities - long term disability	—			—			105
Foreign R&D credit	—			—			1,165
Foreign withholding taxes	369			—			—
Non-deductible exchange gain or loss	(587		)	—			—
Deferred tax adjustments	2,016			—			—
Accrued tax adjustments	(1,348		)	—			—
Tax benefits of other comprehensive income	(154		)	—			—
Other	(25		)	275			(403		)
Total	$	(9,587	)	$	(1,382	)	$	(7,417	)

Schedule of Deferred Tax Assets and Liabilities

Significant components of deferred tax assets and liabilities were as follows:



	September 30, 2019			September 30, 2018
Deferred Tax Assets
Receivable allowances	$	1,018		$	975
Reserves and accruals	24,473			16,813
Inventory valuation and other assets	4,989			3,772
Investment in partnership	2,569			4,345
Unrealized foreign exchange gains (losses)	6,730			4,632
Other deferred taxes	897			704
Disallowed interest	7,096			—
Net operating loss carryforwards	49,786			42,392
Gross deferred tax assets	97,558			73,633
Less: Valuation allowance	(41,084		)	(36,683		)
Deferred tax assets less valuation allowance	56,474			36,950
Deferred Tax Liabilities
Goodwill	(9,801		)	(7,231		)
Fixed assets	(38,293		)	(20,372		)
Intangibles	(15,720		)	(15,717		)
Other deferred tax liabilities	(3,418		)	(2,287		)
Gross deferred tax liabilities	(67,232		)	(45,607		)
Net deferred tax liabilities	$	(10,758	)	$	(8,657	)

Summary of Valuation Allowance

A reconciliation of the valuation allowance on deferred tax assets is as follows:



	Year Ended September 30,
	2019			2018			2017
Valuation allowance beginning of period	$	36,683		$	48,573		$	47,846
Change in assessment	(865		)	—			—
Current year operations	3,495			(1,435		)	3,398
Foreign currency and other	2,254			71			(953		)
Acquisitions	(483		)	(10,526		)	(1,718		)
Valuation allowance end of period	$	41,084		$	36,683		$	48,573

Schedule of Unrecognized Tax Benefits Roll Forward

The following is a reconciliation of the Company’s total gross unrecognized tax benefits:



	Year Ended September 30,
	2019		2018		2017
Balance as of beginning of period	$	—	$	—	$	—
Tax positions related to the current year
Additions	—		—		—
Tax positions related to prior years
Additions	1,075		—		—
Expiration of statutes of limitations	—		—		—
Balance as of end of period	$	1,075	$	—	$	—

Summary of Operating Loss Carryforwards

Tax attributes available to reduce future taxable income begin to expire as follows:



	September 30, 2019		First year of Expiration
Federal net operating loss	$	197,122	September 30, 2034
State net operating loss	94,082		September 30, 2019
Foreign net operating loss	2,814		September 30, 2023
Foreign net operating loss (Germany and the UK)	18,806		Indefinitely