Income Taxes

3 Months Ended

Jul. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

. Income Taxes

Income tax expense of $379,000 was recorded for the three months ended July 31, 2022. Income tax expense of $251,000 was recorded for the three months ended July 31, 2021. The effective tax rate was (111.5)% for the three months ended July 31, 2022. The effective tax rate was (23.8)% for the three months ended July 31, 2021. The change in the effective tax rate for the period is primarily due to the impact of foreign operations which are taxed at different rates than the U.S. tax rate of 21% and the recording of a valuation allowance against the deferred tax asset which resulted in the elimination of any U.S. income tax benefit.

In August 2019, the Company revoked its indefinite reinvestment of foreign unremitted earnings position in compliance with ASC 740 "Income Taxes" and terminated its indefinite reinvestment of unremitted earnings assertion for the Singapore, China, and Kewaunee Labway India Pvt. Ltd. international subsidiaries. The Company has a deferred tax liability of $1,042,000 and $976,000 for the withholding tax related to Kewaunee Labway India Pvt. Ltd. as of July 31, 2022 and April 30, 2022, respectively. The Company recorded all deferred tax assets and liabilities related to its outside basis differences in its foreign subsidiaries consistent with ASC 740.