Note 5 - Income Taxes

12 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

5.  INCOME TAXES

Income tax expense related to continuing operations consists of the following: 

	Fiscal Year Ended March 31,
	2014			2013			2012
Current:
Federal	$	1,064		$	(20,627	)	$	-
State		601			(1,124	)		-
Deferred		(503	)		-			283
	$	1,162		$	(21,751	)	$	283

The following table indicates the significant elements contributing to the difference between the statutory federal tax rate and the Company’s effective tax rate on income from continuing operations for fiscal years 2014, 2013, and 2012:

	Fiscal Year Ended March 31,
	2014			2013			2012
Tax at federal statutory rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal benefit		17.7			1.7			(0.9	)
Net non-deductible expenses		(0.6	)		-			(5.1	)
Non-deductible goodwill impairment charge		-			(9.1	)		-
Increase in valuation allowance		(0.9	)		(0.3	)		(46.4	)
Effective tax rate		51.2	%		27.3	%		(17.4	)%

The components of deferred tax assets and deferred tax liabilities at March 31, 2014 and 2013 are as follows:

	March 31,
	2014			2013
Deferred tax assets:
Stock-based compensation	$	2,553		$	2,209
Inventory reserve		844			567
Allowance for doubtful accounts		250			333
Accrued expenses		440			720
Net state operating loss carryforwards of acquired company		1,288			1,037
Capital leases		5,483			5,396
		10,858			10,262
Valuation allowance		(1,017	)		(1,037	)
Total deferred tax assets	$	9,841		$	9,225
Deferred tax liabilities:
Goodwill	$	8,127		$	6,356
Depreciation and amortization		6,995			7,874
Total deferred tax liabilities	$	15,122		$	14,230
Net deferred tax liability	$	5,281		$	5,005

In assessing whether the deferred tax asset is realizable, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

The Company maintains a valuation allowance against certain state net operating loss carry forwards as the Company could not conclude that it will be able to utilize the state net operating loss carry forwards on a more-likely-than-not basis. During fiscal 2014, the Company decreased its valuation allowance by $20.  As of March 31, 2014, the Company’s valuation allowance amounted to $1,017.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:

Balance at March 31, 2012	$	21
Additions based on tax positions taken in the current and prior years		526
Balance at March 31, 2013	$	547
Additions based on tax positions taken in the current and prior years		340
Balance at March 31, 2014	$	887

The Company records accrued interest and penalties related to income tax matters in the provision for income taxes in the accompanying consolidated statement of operations. The accrued gross interest and penalties were $125 as of March 31, 2014 and $48 as of March 31, 2013. In addition, the Company believes that the uncertain tax positions will not materially change within the next twelve months.

The Company is subject to taxation by the U.S. Government and various state and local jurisdictions.  The Company’s U.S. federal tax return and most state jurisdictions remain open to examination for the fiscal year ended March 31, 2011 through March 31, 2014.  During fiscal 2014, the Company concluded a New York State examination for the fiscal years ended March 31, 2011, 2010 and 2009 with an immaterial assessment.  The Company is currently subject to income tax audits in New Jersey and Massachusetts, however, the examinations are preliminary.