Quarterly report pursuant to Section 13 or 15(d)

Note 9 - Income Taxes

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Note 9 - Income Taxes
 3 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
Note
9.
Income Taxes
 
For the
three
months ended
December
31,
2016,
the Company recorded a provision for income taxes of
$367,000,
reflecting an effective tax rate of
29.5%.
The primary difference between the effective tax rate and the statutory tax rate is related to nondeductible meals and entertainment, favorable domestic manufacturing deduction and research and development credits, expenses related to equity award compensation and favorable discrete items for the quarter from tax benefits related to stock-based compensation awards.
 
As of both
December
31,
2016
and
September
30,
2016,
the Company had a remaining valuation allowance of approximately
$
322,000
related to state net operating loss carry forwards the Company does not expect to utilize. Based on the Company’s analysis and review of long-term forecasts and all available evidence, the Company has determined that there should be no change in this existing valuation allowance in the quarter ended
December
31,
2016.
 
For the
three
months ended
December
31,
2015,
the Company recorded a provision for income taxes of
$526,000,
reflecting an effective tax rate of
26.1%.
The primary difference between the effective tax rate and the statutory tax rate is related to nondeductible meals and entertainment, expenses related to equity award compensation and favorable discrete items for the quarter from tax benefits related to stock-based compensation awards and research and development credits which were permanently extended in
December
2015
by the federal government.
 
Deferred taxes recognize the impact of temporary differences between the amounts of the assets and liabilities recorded for financial statement purposes and these amounts measured in accordance with tax laws. The Company’s realization of deferred tax temporary differences is contingent upon future taxable earnings. The Company reviewed its deferred tax asset for expected utilization using a “more likely than not” criteria by assessing the available positive and negative factors surrounding its recoverability.
 
As of
December
31,
2016,
we do not have any unrecognized tax benefits. It is the Company’s practice to recognize interest and penalties accrued on any unrecognize
d tax benefits as a component of income tax expense. The Company does
not
expect any material changes in its unrecognized tax positions over the next
12
months.
 
During the quarter ended
December
31,
2015,
the Company early adopted Accounting Standards Update (“ASU”)
2015
-
17
to present balance sheet classification of deferred income taxes as noncurrent. This adoption was applied prospectively and therefore, prior periods were not retrospectively adjusted.