Income Taxes Income Taxes (Tables)

12 Months Ended

Sep. 30, 2014

Schedule of Components of the Provision (Benefit) for Income Taxes

The components of the provision (benefit) for income taxes are as follows:



	Year Ended September 30,
	2014			2013			2012
	(dollars in thousands)
Current:
United States	$	370		$	(150	)	$	2,440
Foreign	530			800			(9,380		)
State	80			(110		)	(90		)
Total current	980			540			(7,030		)

Deferred:
United States	(490		)	(290		)	—
Foreign	750			1,610			1,700
State	—			—			10
Total deferred	260			1,320			1,710
Total provision (benefit)	$	1,240		$	1,860		$	(5,320	)

Reconciliation of Actual Income Taxes to Expected Federal Corporate Income Taxes

A reconciliation of actual income taxes to income taxes at the expected United States federal corporate income tax rate of thirty-four percent is as follows:



	Year Ended September 30,
	2014			2013			2012
	(dollars in thousands)
Tax provision (benefit) at the U.S. rate	$	(4,440	)	$	(6,750	)	$	(11,190	)
Effect of permanent book-tax differences	30			970			2,010
State tax provision	80			(110		)	(80		)
Valuation allowance for net deferred tax assets	3,900			5,850			1,740
Uncertain tax items	370			450			(240		)
Expiration of foreign net operating loss	—			—			2,320
Difference between U.S. and foreign rates	1,000			1,440			—
Other items	300			10			120
	$	1,240		$	1,860		$	(5,320	)

Schedule of Deferred Tax Assets and Deferred Tax Liability

The tax effects of temporary book-tax differences that give rise to significant portions of the deferred tax assets and deferred tax liability are as follows:



	Year Ended September 30,
	2014			2013			2012
	(dollars in thousands)
Deferred tax assets - current:
Capitalized inventory costs	$	230		$	130		$	90
Inventory write-downs	950			620			600
Accrued warranty	180			200			20
Deferred profits	1,460			800			2,510
Accruals and reserves not currently deductible	520			490			240
Deferred tax assets - current	$	3,340		$	2,240		$	3,460
Valuation allowance	(2,280		)	(910		)	—
Deferred tax assets - current net of valuation allowance	$	1,060		$	1,330		$	3,460

Deferred tax assets (liabilities)- non-current:
Stock option expense	$	670		$	700		$	470
Book vs. tax basis of acquired assets	(1,210		)	(1,130		)	(1,280		)
Federal net operating loss caryforwards	900			—			—
Foreign and state net operating losses	8,070			9,000			3,640
Book vs. tax depreciation and amortization	(10		)	60			100
Foreign tax credits	—			520			—
Other deferred tax assets	2,950			(350		)	140
Total deferred tax assets - non-current	11,370			8,800			3,070
Valuation allowance	(10,070		)	(7,540		)	(2,600		)
Deferred tax assets (liabilities) - non-current, net of valuation allowance	$	1,300		$	1,260		$	470

Changes in Deferred Tax Valuation Allowance

Changes in the deferred tax valuation allowance are as follows:



	Year Ended September 30,
	2014		2013		2012
	(dollars in thousands)
Balance at the beginning of the year	$	8,450	$	2,600	$	860
Additions to valuation allowance	3,900		5,850		1,740
Balance at the end of the year	$	12,350	$	8,450	$	2,600

Schedule of Unrecognized Tax Benefit Liabilities

A reconciliation of the beginning and ending amount of our unrecognized tax benefits is summarized as follows:



	Year Ended September 30,
	2014		2013			2012
	(dollars in thousands)
Balances at beginning of the year	$	2,810	$	2,360		$	2,630
Additions (reductions) related to current year tax positions	—		—			(390		)
Additions related to tax positions taken in prior years	370		530			360
Reductions related to settlements with tax authorities	—		—			(240		)
Reductions due to lapse of statute of limitations	—		(80		)	—
Balance at the end of the year	$	3,180	$	2,810		$	2,360