Note 11 - Income Taxes
 12 Months Ended
Mar. 31, 2017
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
Note
11.
Income Taxes
 
Earnings before income taxes are as follows (in thousands):
 
 
 
Year Ended March 31,
 
 
 
2017
 
 
2016
 
 
2015
 
Domestic
   $
12,913
     $
14,427
     $
14,896
  
Foreign
    
1,383
      
1,128
      
451
  
    $
14,296
     $
15,555
     $
15,347
  
 
The components of our provision for income taxes are as follows (in thousands):
 
 
 
Year Ended March 31,
 
 
 
2017
 
 
2016
 
 
2015
 
Current tax provision
                        
Federal
   $
2,282
     $
3,666
     $
4,186
  
State
    
510
      
627
      
1,135
  
Foreign
    
849
      
658
      
212
  
     
3,641
      
4,951
      
5,533
  
Deferred tax provision:
                        
Federal
    
(126
 )    
(189
 )    
252
  
State
    
(32
 )    
(138
 )    
51
  
Foreign
    
(370
 )    
(238
 )    
(72
 )
     
(528
 )    
(565
 )    
231
  
    $
3,113
     $
4,386
     $
5,764
  
 
The components of net deferred tax assets and liabilities are as follows (in thousands):
 
 
 
March 31,
 
 
 
201
7
 
 
201
6
 
Current deferred tax assets:
                
Accrued employee-related expenses
   $
242
    $
257
 
Allowances and reserves
    
132
      
217
  
Stock option deductible differences
    
898
      
606
  
Inventory
    
691
      
533
  
Currency translation adjustment
    
--
      
12
  
Net operating loss
    
--
      
110
  
Other
    
9
      
3
  
     
1,972
      
1,738
  
                 
Long-term deferred tax liability:
                
Property, plant and equipment
    
(1,635
 )    
(1,599
 )
Goodwill and intangible assets
    
(3,807
 )    
(4,335
 )
Currency translation adjustment
    
(3
 )    
--
  
Other
    
(81
 )    
(5
 )
     
(5,526
 )    
(5,939
 )
                 
Net deferred tax liability
   $
(3,554
 )   $
(4,201
 )
 
A reconciliation of our income tax provision and the amounts computed by applying statutory rates to income before income taxes is as follows (in thousands):
 
 
 
Year Ended March 31,
 
 
 
2017
 
 
2016
 
 
2015
 
Federal income taxes at statutory rates
   $
4,861
     $
5,445
     $
5,374
  
State income taxes, net of federal benefit
    
302
      
293
      
860
  
Tax benefit of stock option exercises
    
(1,576
 )    
(751
 )    
209
  
Section 199 manufacturing deduction
    
(304
 )    
(440
 )    
(317
 )
Research and development credit
    
(385
 )    
(345
 )    
(248
 )
Other
    
215
      
184
      
(114
 )
    $
3,113
     $
4,386
     $
5,764
  
 
We or
one
of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Our federal tax returns for all years after
2013,
state tax returns after
2012,
and foreign tax returns after
2013
are subject to future examination by tax authorities for all our tax jurisdictions. Although the outcome of tax audits, if any, is always uncertain, we believe that we have adequately accrued for all amounts of tax, including interest and penalties and any adjustments that
may
result.
 
During the year ended
March 31, 2017,
the IRS examination of our tax year ended
March 31,
2015
was completed with
no
change to the reported tax liability.
 
As of
March 31, 2017,
the gross amount of unrecognized tax benefits was
$331,000.
There would have been
no
impact on our effective tax rate for the year ended
March 31, 2017
had these benefits been recognized. We recognize interest and penalties related to unrecognized tax benefits in other expense and general and administrative expense, respectively.  Accrued interest and penalties related to unrecognized tax benefits were
$17,000,
$3,000
and
$0
as of
March 31, 2017,
2016
and
2015,
respectively. A reconciliation of the changes in the gross balance of unrecognized tax benefit amounts is as follows (in thousands):
 
 
 
Year Ended March 31,
 
 
 
2017
 
 
2016
 
 
2015
 
Beginning balance
  $
221
     $
--
     $
--
  
Increases related to current period tax positions
    
110
      
221
      
--
  
Ending balance
   $
331
     $
221
     $
--
  
 
We expect that the amount of unrecognized tax benefits will change in the next
12
months; however, we do
not
expect the change to have a significant impact on our consolidated statements of income or consolidated balance sheets. At this time, we expect resolution of the uncertain tax position within
12
months.
 
 
As of
March 31, 2017,
undistributed earnings of our Canadian subsidiary amounted to
$3,164,234.
Those earnings are considered to be indefinitely reinvested and, accordingly,
no
U.S. federal and state income taxes have been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, we would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is
not
practicable because of the complexities associated with its hypothetical calculation; however, unrecognized foreign tax credits would be available to reduce a portion of the U.S. tax liability.